Cape Town - Growth in export volumes in the first half of this year was outpaced by continued import growth, Finance Minister Pravin Gordhan said on Wednesday.
In his 2013 mini budget statement, tabled in Parliament, he said along with a decline in the terms of trade (the price of exports relative to imports), this led to a trade deficit of 2.6% of GDP in the first half of the year.
The value of exports increased by 14.2% over the first half of 2013, led by manufactured goods.
Over the same period, the value of imports increased by 15.8%, due to strong growth in capital goods procurement.
The main contributors to import growth had been mineral products (mainly petroleum), chemicals, plastic, rubber, machinery and appliances (capital equipment) and transport equipment.
Moderately higher economic growth in advanced economies over the first six months of the year increased demand for South African products.
Exports to China increased by 19.7% in the first half of the year, supported by mineral product exports and a five-fold increase in vehicle exports.
The Southern African Development Community (SADC) region was South Africa’s second-largest market after the European Union, accounting for 22.3% of manufactured exports.
Import growth was expected to remain resilient as investment in infrastructure and capital equipment accelerated.
"Alongside efforts to raise their levels of innovation and competitiveness, exporters can benefit from a favourable exchange rate, stronger global growth and improved domestic supply conditions.
"Export prospects to the United States could be enhanced by extension of South Africa’s trade access under the African Growth and Opportunity Act beyond 2015."
The current account deficit remained high at 6.5% of GDP.
"The trade deficit remains high, while the net income and service receipts are unchanged from 2012."
The current account deficit was projected to remain at about six percent over the medium-term as investment growth continued to outpace increases in domestic savings.