South Africa’s current account deficit has widened to 2.1% of Gross Domestic Product (GDP) in the first quarter of 2017, says the Reserve Bank.
“The deficit on the current account of the balance of payments widened from R76 billion in the final quarter of 2016 to R92 billion in the first quarter of 2017. As a ratio of GDP, the deficit widened somewhat from 1.7% to 2.1% over this period,” said the central bank as it released its June Quarterly Bulletin on Tuesday.
South Africa’s trade surplus was sustained for a second consecutive quarter, widening marginally from R56 billion in the fourth quarter of 2016 to R57 billion in the first quarter of 2017.
According to the bulletin, the higher trade surplus resulted from a slight increase in the value of net gold and merchandise exports more than fully offsetting the marginal increase in the value of merchandise imports.
“The broadly unchanged trade surplus occurred alongside a widening of the shortfall on the services, income and current transfer account, from R132 billion in the fourth quarter of 2016 to R149 billion in the first quarter of 2017,” said the Reserve Bank.
The current account deficit came in lower than market expectation with Nedbank economists, adding that the current account deficit is likely to widen further in the coming quarters as domestic demand rises albeit at a moderate pace.
The economists expect the domestic economy to return to modest growth in the coming months.
“The domestic economy is expected to return to modest growth in the quarters ahead, mainly supported by the recoveries in agriculture, mining and manufacturing sectors.”