Johannesburg - The deficit on South Africa's current account
widened to 4.9% of gross domestic product (GDP) in the first quarter, its
biggest in more than three years, mainly because of higher net dividend
payments to offshore investors in the quarter.
In its June Quarterly Bulletin which reports on data from
the first quarter, the South African Reserve Bank said on Thursday the
shortfall on the current account had expanded from 3.6% in the previous
quarter.
A stronger rand and lower domestic supply had led to smaller
export proceeds over the first quarter.
The value of export earnings contracted by 2.4% in the first
quarter compared to a 6.4% expansion in the fourth quarter of last year as
prices fell in tandem with a 0.4% contraction in volumes, which were hampered
by lower demand and domestic supply constraints, especially in the mining
sector.
Merchandise imports nudged up 0.3% in value and the price of
imports declined due to lower inflation in the trading countries and a firmer
rand in South Africa.
The Reserve Bank said the pace of foreign portfolio capital
inflows increased in the first three months of the year compared to the last
quarter of 2011, resulting in R50.5bn of flows compared to R19.9bn in the
fourth quarter.
The bank said the gap in the current account continued to be
adequately funded by foreign inflows.