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South Africa’s current account deficit shrank markedly in fourth quarter 2010 – something regarded as positive for the rand. The current account is the trade balance less net payments for “invisibles” – such as income, dividends, interest, freight and insurance. Its shrinkage is largely the result of a big trade surplus but also reflects lower net payments for “invisibles”. SA is less dependent on foreign capital inflows.
TINY BALANCE The balance on the current account registered a significantly smaller deficit of R17bn (seasonally adjusted and annualised) or 0,6% of GDP in fourth quarter 2010. A similar magnitude was last recorded in fourth quarter 2003.
SHORTFALL NARROWS The shortfall on the services, income and current transfer account of the balance of payments (trade in “invisibles”) narrowed by about R10bn to R103bn in fourth quarter 2010 (seasonally adjusted and annualised). The balance was more or less equal to the average quarterly deficit for the year 2010 as a whole.
TRADE SURPLUS Exports defied a strong rand as the relatively strong global expansion in fourth quarter 2010 with firm commodities prices paved the way to a higher trade surplus. Imports dropped as exports rose, with imports showing the results of lower capital expenditure. Consequently, SA’s trade surplus almost tripled from R30,3bn in the third quarter to R86bn in fourth quarter 2010.
PORTFOLIO OUTFLOWS Foreign portfolio investment into the SA market recorded an outflow of R10,4bn in fourth quarter 2010 – the first reduction in portfolio liabilities to be recorded since 2008. The change in market sentiment and the subsequent reduction in speculative capital flows were evident in most developing economies, as renewed financial turbulence in the peripheral euro economies saw investors seek US dollar safe havens.
TINY BALANCE The balance on the current account registered a significantly smaller deficit of R17bn (seasonally adjusted and annualised) or 0,6% of GDP in fourth quarter 2010. A similar magnitude was last recorded in fourth quarter 2003.
SHORTFALL NARROWS The shortfall on the services, income and current transfer account of the balance of payments (trade in “invisibles”) narrowed by about R10bn to R103bn in fourth quarter 2010 (seasonally adjusted and annualised). The balance was more or less equal to the average quarterly deficit for the year 2010 as a whole.
TRADE SURPLUS Exports defied a strong rand as the relatively strong global expansion in fourth quarter 2010 with firm commodities prices paved the way to a higher trade surplus. Imports dropped as exports rose, with imports showing the results of lower capital expenditure. Consequently, SA’s trade surplus almost tripled from R30,3bn in the third quarter to R86bn in fourth quarter 2010.
PORTFOLIO OUTFLOWS Foreign portfolio investment into the SA market recorded an outflow of R10,4bn in fourth quarter 2010 – the first reduction in portfolio liabilities to be recorded since 2008. The change in market sentiment and the subsequent reduction in speculative capital flows were evident in most developing economies, as renewed financial turbulence in the peripheral euro economies saw investors seek US dollar safe havens.
