Johannesburg – South Africa’s trade balance remained positive for July 2017 and with increased exports due to improving global demand.
According to trade data released by the South African Revenue Service (SARS), the trade surplus recorded for July was R8.99bn. This is an improvement from the surplus of R0.41bn recorded in the previous year, but it is down from June’s revised surplus of R10.6bn. The year-to-date trade balance surplus is at R36.63bn, compared to the deficit of R4.70bn recorded for the same period in 2016.
Exports over the past period had grown 4.4% to R657.34bn and imports declined 2.2% to R620.71bn. Total exports for July came to R93.09bn, while the value of imports was R84.10bn.
Kamilla Kaplan, economist at Investec, said the trade surplus exceeded market expectations of R7.1bn.
Leading indicators show sustained growth in global trade. “Industrial activity has remained buoyant across most regions which should be reflected in ongoing trade growth.”
Further, the Purchasing Manufacturer’s Index (PMI) increased for the 12th consecutive month, while the World Trade Organisation’s World Trade Outlook Indicator suggests that global merchandise trade growth will continue to strengthen in the third quarter, Kaplan explained.
Although the South African economy is expected to continue underperforming, with growth projected at 0.5%, these factors suggest the trade balance and the current account balance could report “small surpluses” or “contained deficits”.
Karl Gotte, Standard Bank Head of Commercial Banking, expects the improved domestic retail sales, improving trade, catering and accommodation industry and mining and manufacturing outputs could contribute to GDP growth for the second quarter of the year. Statistics South Africa (StatsSA) will release GDP results for the quarter next week.
Also lower inflation of 4.6% was reported for July, combined with lower food and petrol price inflation provided relief for households and businesses, ahead of the electricity tariff hike, he said.
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