Trade deficit widens as exports drop

Johannesburg - South Africa’s trade deficit widened in August as exports of minerals such as coal and iron-ore declined and oil imports rose.

The trade gap increased to R9.95bn ($720m) from a revised R1.1bn in July, the South African Revenue Service said in a statement on Wednesday. The median estimate of 14 economists surveyed by Bloomberg was for a shortfall of R3.4bn.

The deficit for the first eight months of the year was R36.3bn compared with R69.9bn in 2014.

The deficit on the trade account will keep pressure on the current account, the broadest measure of trade in goods and services, and the rand, which fell to a record against the dollar this week. The current account shortfall eased to 3.1% of gross domestic product in the three months through June, the lowest in almost four years, from 4.7% in the previous quarter.

“The broadly unfavourable global growth prospects are likely to exert pressure on South Africa’s potential export growth,” Kamilla Kaplan, an economist at Investec in Johannesburg, said in an emailed note to clients before the data was released.

The rand has weakened 16% against the dollar this year. The positive effect of the depreciation on export volumes is limited by the slowing global economy, electricity supply constraints and declining tourism receipts, the Reserve Bank said on September 23. The currency was little changed at R13.8540/$ from before the data was released.

Exports declined by 5.9% to R87.6bn, led by a 20% drop in shipments of minerals products. Imports rose 3.6% to R97.6bn as purchases of vehicle and transportation equipment jumped 22% and the category that includes oil surged 12%.

The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.