R9.5BN TRADE SURPLUS IN MAY
Boosted by higher sales of manufactured and vegetable products
THE SA REVENUE Services (Sars) on Friday said the trade surplus widened to R9.5 billion in May from a downwardly revised R5bn recorded the previous month boosted by higher sales of miscellaneous manufactured articles and vegetable products.
Karl Gotte, the head of commercial banking at Standard Bank, said on Friday that the trade balance was supported by a more stable to stronger rand compared with previous months, hence the increase in the export volume as seen in mining machinery, electronics, and transport equipment.
“Whilst the trade balance is only one component of the current account, it shows that the real economy is adjusting in spite of gross domestic product (GPD) growth forecast being revised downwards in 2017 as consumer and business sentiments fail to recover from the current lows due heightened political and policy uncertainty,” Gotte said.
Earlier this month, data from the SA Chamber of Commerce business confidence index fell to 93.2 points in May, which is the lowest since October.
May’s trade surplus was the net effect of increases in both exports and imports. Exports increased by 15.4 percent month-on-month to R13.9bn, while imports increased by 11 percent month-on-month to R9.4bn.
Largest increase
The largest monthly increases in exports were recorded in the vegetable products which increased 46 percent on a monthly basis to R1.8bn, while base metals went up 14 percent month-on-month to R1.6bn.
Vehicles and transport equipment increased 15 percent to R1.5bn, while chemical products increased by 28 percent on a monthly basis to R1.4bn and miscellaneous manufactured articles surged 220 percent month-on-month to R1.3bn.
In the year to end-May exports increased by 6.1 percent compared with the same period in 2016.
Meanwhile, the largest monthly increases in imports were recorded in mineral products which increased by 22 percent in the period to R3.1bn, while original equipment components surged 33 percent month-on-month to R2.1bn and machinery and electronics increased 7 percent on a monthly basis to R1.4bn. On a yearly basis, imports declined by 1.3 percent.
Elize Kruger, an analyst at NCK Research, said with four consecutive monthly trade surpluses now recorded, the early indications for 2017 were positive.
“Export growth is supported by a moderate recovery in South Africa’s major trading partners and higher commodity prices, whereas the sluggish local economy is keeping a lid on import growth – both developments are playing favourably into an improved trade balance, which will also have a positive impact on the current account balance and, subsequently, also on the rand exchange rate,” Kruger said.
“Following the positive start to 2017, we forecast a current account deficit of 3.2 percent of GDP this year, compared to an estimated deficit of 3.3 percent of GDP for 2016,” she said.