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South Africa's current account deficit narrowed to a nine-year low in the fourth quarter as outflows decreased.
The shortfall on the current account, the broadest measure of trade in goods and services, shrank to 1.3% of gross domestic product from 3.7% in the previous period, the South African Reserve Bank said in a report released Thursday in Pretoria.
That's the smallest gap since the final three months of 2010. The median estimate of three economists in a Bloomberg survey was for a deficit of 3%.
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The narrower-than-expected gap was mainly driven by an improvement in the shortfall on South Africa's primary income account, which reflects outflows due to dividends and interest payments to foreign shareholders, and a decline in imports partly because of weak economic activity.
The current account shortfall for 2019 narrowed to 3% of GDP, from 3.5% in the prior year.
The improvement in the current account deficit may ease some of the pressure on the rand, which has weakened 8.7% against the dollar this year amid risks associated with the spread of the Coronavirus (COVID-19) and a deterioration in South Africa's public finances.
The trade surplus widened to R102.5 billion from a revised R44 billion in the three months through September as the value of exports increased while imports dropped 2.6% from the previous quarter. For the year, the trade surplus grew to 0.8% of GDP from 0.5% in 2018.
