EDITORIAL: Some bad news nestled in good
One of the reasons for the improved balance is weak trade data, underpinned by lower imports that reflect weak consumer demand for imported goods
One of the problems with South African economics and, perhaps economics in general, is that what seems like good news can often include bad news. And vice versa. And sometimes both at the same time. This is certainly the case with SA’s current account deficit, which, it was announced on Wednesday, had fallen unexpectedly steeply. The Reserve Bank’s Quarterly Bulletin showed the deficit on the current account of the balance of payments fell to 1.7% of GDP in the fourth quarter of last year. A current account deficit is recorded when the value of the goods and services a country imports exceeds the value of the goods and services it exports. For 2016 as a whole, the deficit on the current account came in at 3.3%, down from 4.4% in 2015. This is good news, exacerbated by its unexpectedness. Quarterly current account deficits of 1.7% or less were last seen the last time commodity prices rallied in 2010-11. But nestled within the good news are some disturbing trends. One of the reasons f...
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