SA trade account in deficit

Johannesburg - South Africa’s trade account recorded a wider-than-expected trade shortfall of R9.6bn in October compared with a R2.5bn surplus in September, the South African Revenue Service said on Wednesday.

Exports fell by 9.7% month-on-month to R61.2bn in October while imports were up 8.5% to R70.8bn.

Economists surveyed by Reuters expected a trade shortfall of only R2.5bn for October, but the data are volatile.

Peter Attard Montalto, emerging market analysts at Nomura, said exports were down.

“Exports fell back to 22% year-on-year from 27% previously on mining and industrial products whilst imports increased slightly to 33% from 32%  previously. It seems we are seeing the impacts of lower global demand and eurozone recession but this is not a good number for trade drag on GDP (gross domestic product) in Q4.”

The trade account recorded its first annual surplus in seven years last year, but is on track for deficit in 2011 as the local economy recovers - albeit hesitantly - and imports rise.

The wider trade shortfall will weigh on the current account, which expanded to 3.3% of GDP in the second quarter of 2011 from 3.1% shortfall in the first quarter.

The trade balance is also likely to be hit by lower exports to Europe, South Africa’s largest trading partner, where a sovereign debt crisis afflicting member countries is seen denting growth.