South Africa records Trade deficit of R21.2 billion

Striking South African miners armed with homemade spears and pangas chant slogans near Marikana platinum mine in Rustenburg, South Africa, on Thursday, August 16.

South Africa recorded a trade deficit of R21.2 billion in October from R13.8 billion in September as strikes and imports soar, the South African Revenue Service (SARS) said on Friday.

"The R21.2 billion deficit for October 2012 was due to an increase in exports of 7.8% and an increase in imports of 16.7%. Exports increased by R4.4 billion (7.8%) and imports increased by R11.8 billion (16.7%)," said the revenue service.
 
Market consensus was that the trade deficit in October would be R15.4 billion from the R13.8 billion that was recorded in September.
 
In September, the country's trade account continued to worsen, with the account recording its ninth consecutive deficit.
 
According to SARS, the increased trade deficit for October was mainly due to increased imports of machinery and electrical appliances, chemical products and vehicles, aircraft and vessels.
 
"The cumulative deficit for the year to date is R104.6 billion compared to R9.4 billion for the same period in 2011," said SARS.

The widening trade gap is adding to pressure on the current account and threatening to undermine the rand. South Africa posted a current-account deficit of 6.4 percent of gross domestic product in the second quarter, the most in almost four years.

Africa’s biggest economy relies on foreign investment in stocks and bonds to finance the shortfall, inflows that have fluctuated this year as slower economic growth led some investors to sell riskier, emerging-market assets.

The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.
 
Economists say that the country's trade performance will remain weak in the coming months due to the unfavourable global and local environment.
 
"As a result of the substantially larger cumulative trade deficit, the current account deficit as a percentage of GDP will deteriorate to well over 6% this year from 3.3 % in 2011," noted Nedbank economists.