South Africa posted the biggest trade surplus since at least 1996 in May as exports of precious metals and stones surged.
The trade surplus widened to 18.7 billion rand ($1.27 billion) from a revised deficit of 130 million rand in April, the Pretoria-based South African Revenue Service said in an e-mailed statement on Thursday. The median of 10 economist estimates compiled by Bloomberg was for a surplus of 4.1 billion rand.
A recovery in exports, which are starting to benefit from the rand’s 21% decline against the dollar over the past 18 months, could help narrow the deficit on the current account that swelled to 5% of gross domestic product in the first quarter. Africa’s most-industrialized economy has been weighed down by low metal prices, the worst drought in more than a century and weak demand from the nation’s main export markets. Domestic output contracted 1.2% in the first quarter.
“The big surprise came from the precious metals component, which rose 49% month-on-month”, Carmen Nel, an economist at FirstRand Ltd’s investment banking unit, said by phone from Cape Town. “It may reflect the cyclical under-performance in precious metals exports in recent months and quarters.”
Exports rose by 14% to 104.7 billion rand, led by the jump in precious metals and a 27% increase in vegetable shipments. Imports dropped by 6.6% to 86 billion rand. Exports have risen 10% this year to 452 billion rand compared to the same period in 2015.
The rand strengthened after the data was released and was 0.7% stronger against the dollar at 14.69 in Johannesburg.
