South Africa’s foreign trade surplus unexpectedly widened to ZAR5.8bn ($454.9mn) in June, from a revised ZAR4.94bn in May, preliminary data from the South African Revenue Service (SARS) showed. The May figure was revised from an initial estimate of a ZAR4.99bn surplus.
The data surprised analysts, who had expected the surplus to shrink to around ZAR1bn in June on the back of a slowdown in exports amid broadly soft global demand, according to Business Day.
However, exports grew 1.6% m/m to ZAR90.28bn in June, driven up mainly by a 24.6% surge in vegetable exports, as well as by an 8.6% growth in exports of vehicles and transport equipment, and a 6.9% rise in machinery and electronics.
At the same time, imports edged up 0.7% m/m to ZAR84.48bn chiefly due to a 13.8% drop in imports of mineral products, coupled with a 31.5% fall in vegetable imports, and a 6.8% decline in imports of vehicles and transport equipment.
For the first six months of the year, South Africa’s trade gap totalled ZAR24.65bn, 47% smaller y/y. Exports grew 4.3% y/y to ZAR497.4bn, while imports shrank 0.3% y/y to ZAR522bn.
The significant improvement in the trade balance in May and June, probably driven by the weakening rand and improved labour relations (no major strikes), could help reduce South Africa’s worryingly wide current account deficit. The gap narrowed to 4.8% of GDP in Q1 from 5.1% in Q4, as a twofold increase in the trade shortfall was more than offset by smaller deficit on the services, income and current transfer account.
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