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Weak rand helps boost trade surplus as 2016 exports up 11%

Cape Town – South Africa recorded a trade surplus of R12.53bn in June, the SA Revenue Service (Sars) said on Friday.

The cumulative trade balance surplus of R12.52bn is an improvement on the deficit for the comparable period in 2015 of R22.95bn.

South Africa exported R105.22bn worth of goods and imported R92.69bn worth of goods in June, Sars said in a statement.

So far, South Africa has exported R556.41bn worth of goods in 2016, which is 11.3% more than the exports of R499.79bn recorded in January to June 2015.

Imports for the year- to-date of R543.90bn are 4% more than the imports recorded in January to June 2015 of R522.74bn.

May 2016’s trade balance surplus was revised downwards by R0.36bn to R18.37bn.

“The country’s export market has been doing well this year,” Karl Götte, head of Standard Bank commercial banking, said in a statement on Friday.

He said the 11.3% increase in exports was mainly due to the market fluctuations that have been seen globally this year.

“The rand experienced a weak few months at the beginning of the year and has recently improved. The weaker rand provided improved opportunities for exporters to sell their goods,” he said.

He said manufacturing production, which increased by 4% in May 2016 compared with May 2015, was more than expected by the market.

“Although manufacturing was one of the sectors that impacted the 1.2% contraction of the GDP in the first quarter, there have been some pockets of growth within the sector including food and beverages; petroleum; wood and wood products as well as iron and steel.

“The manufacturing sector provides an opportunity to build a better, more collaborative mutually beneficial relationship between the public and private sector. The sector has potential to contribute greatly to the country’s growth if more innovation and collaboration is brought into the sector.”

Götte said the economy benefited from improved weather after the severe drought and lower oil prices.

“The rand has made gains for a number of weeks following the Brexit decision and has appreciated against the US dollar by 8.4% in the past month,” he said.

“Businesses in the private sector could contribute to growth of the economy by bringing agility and innovation to the table. Collaboration and competition in the market are important for bringing about a thriving economy.

“Improvements in manufacturing as one sector would have a greater impact on the wholesale retail trade sector. This would in turn benefit the economy and give rise to opportunities for financial institutions to support and sustain the growth.”

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