Share

Current account deficit narrows, spending rises

Pretoria - The deficit on South Africa's current account deficit narrowed in the first quarter of the year, a South African Reserve Bank (SARB) report showed on Tuesday, although weak exports kept the trade balance under pressure.

In its June quarterly bulletin, the Reserve Bank also said spending growth accelerated in the first three months of the year, helped mainly by a faster pace of consumption by households.

The current account shortfall was smaller at 4.8% of GDP in Q1 compared with 5.1% in the last three months of 2014, as a narrower deficit on the services, income and current transfer account offset a wider trade gap.

Economists surveyed by Reuters had expected a 5% gap for Q1 and the rand, which has long been vulnerable to the chronically wide budget and current account deficit, pared losses after release of the quarterly bulletin.

The South African Reserve Bank said the current account shortfall was financed by portfolio inflows and other investment capital, which neutralised a net outflow in direct investment over the first quarter.

Spending in the economy grew at a faster pace of 3.4% from 0.3% in the previous quarter, led by increased consumption by households.

"The lower domestic price of petrol and a further moderation in food price inflation underpinned the purchasing power of the household sector," the Bank said.

It warned, however, that consumer inflation pressures were expected to intensify due to higher global oil prices, rising food costs, and double-digit electricity tariff hikes.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.90
+0.2%
Rand - Pound
23.86
+0.2%
Rand - Euro
20.36
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent-ruolie
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders