Johannesburg - South Africa’s trade account recorded a trade deficit of R3.7bn in August compared with a R3.9bn shortfall in July, the South African Revenue Service (Sars) said on Friday.
“The trade deficit... was mainly due to increased exports of chemical or allied industries and precious and semi-precious stones and increased imports of machinery and electrical appliances, mineral products and original equipment components,” Sars said.
Exports rose by 8% month-on-month to R61bn in August, but were still outweighed by imports which increased by 7.2% to R64.7bn. Economists surveyed by Reuters expected a narrower R550m shortfal for August, but the data tend to be volatile and hard to predict.
Citadel economist Salomi Odendaal said it was a "rather large" negative number.
"What is encouraging is the actual sale volume of imports and exports is holding up quite nicely. That’s a good indication that economic activity is holding up, which is something that’s rather important for growth locally and globally.
“The imports are doing quite well despite indications that local demand is fairly weak, exports are also holding up under present cirmcumstances so one would assume the global demand, particularly for commodities, is still at a reasonably high level.”
Peter Attard Montalto, emerging market economist at Nomura, said both imports and exports surprised strongly to the upside, which was most likely due to an unwinding of strike-related backlogs in industry.
"But overall a worse terms of trade position now will mean we are likely to see deficits continue rather than the surpluses seen before.”
Jean-Francois Mercier, economist at Citi, said the figure was weaker than expected.
"I was expecting a deficit, but a lesser one. There was a rebound in exports but... at the end the imports surprised me on the upside. We saw a bit a more dynamism in trade flows generally than I thought.
“It is a good sign because we knew that July had been affected by the strikes. (I am) gauging that there has been a bit of normalisation, but the data volatile...”
The trade account recorded its first annual surplus in seven years last year, but is expected to swing back into deficit in 2011 as the local economy recovers - albeit hesitantly - and imports rise.
The deficit on the current account widened to 3.3% of gross domestic product in the second quarter from a 3.1% gap in the first quarter as the rise in the value of imports outpaced that for exports.