SA : Trade deficit narrows as exports decline
THE trade deficit narrowed to R4,3bn last month from R9,1bn in August, partly on a sharp fall in oil shipments, official data showed today.
The decline will alleviate some immediate pressure on an ailing current account, the shortfall of which stood at 6,5% of gross domestic product in the second quarter of the year. The South African Revenue Service (SARS) said both exports and imports fell compared with the previous month, with mineral product shipments, which includes oil, declining 34% month-on-month.
However, analysts said the smaller shortfall may only be temporary, with the gap expected to widen sharply over the next three years on a big jump in imports to feed a massive government infrastructure spending programme.
"If we look at the overall figure it is definitely a smaller deficit than we had expected," ETM economist Russell Lamberti said.
"But the overall trend continues to show what we already know, that we are going to continue to post fairly large deficits for some time to come."
The government and its state-owned entities plan to spend more than R400bn to upgrade infrastructure, with much of the machinery and products likely to be sourced from abroad.
The National Treasury yesterday forecast the current account deficit to widen to 7,8% of GDP by 2010.
SARS said exports declined by 6,2% last month compared to August to R39,81bn, while imports fell by 14,4% to R44,16bn.
Exports of base metals declined by 13% month-on-month, while machinery imports were also down 13% and vehicles and aircraft imports 24%, or R1,5bn, lower.
Market reaction to the data was muted with the gap roughly in line with the consensus R6,4bn deficit, and the data notoriously volatile. The cumulative trade deficit for the first nine months of the year was R55,1bn compared to R42,5bn during the same period last year, SARS said.
