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Johannesburg – The trade surplus of R5.08bn for April is down from R11.28bn reported in March due to a contraction in exports by more than 9%.
This is according to trade data released by the South African Revenue Service (SARS) on Wednesday.
The surplus however is an improvement from the deficit of R2.12bn reported in April 2016.
Overall South Africa’s trade balance for the year so far at R9.89bn is an improvement from the R26.39bn deficit reported for the same period last year. This improved trade balance is expected to continue for the rest of the year, explained Investec economist Kamilla Kaplan.
Exports for April declined by 9.2% but for the year-to-date have grown 6.4% to R360.27bn. Imports declined 3.4% since March, for the year-to-date imports have declined 4.4% to R350.38bn.
Exports to improve
Export growth is expected to be driven by improvements in global trade, said Kaplan.
Kevin Lings, chief economist at Stanlib explained that the improved export performance can be attributed to higher commodity prices, a more stable supply of electricity and less labour market unrest.
The decline in imports reflect weaker domestic demand and lack of domestic fixed investment by the private sector.
Karl Gotte, Standard Bank’s head of commercial banking explained that the country is reliant on external demand and that local demand remains stagnant. “Although the international trade performance is doing reasonably well, the local landscape is still fragile and consumers seem to be directing their spending towards more basic consumables, resulting in reduced demand in the retail sector,” he said.
“The more optimistic global growth forecasts represent an opportunity for businesses to look at exporting into global markets.”
Gotte explained that the local retail slowdown is impacted by the competitiveness of international businesses as well as increasing penetration of e-commerce.
Gotte said that if inflation remains within the target range between 3% and 6%, there may be improvements in consumer confidence and local demand.
