55338
Exports fell in the third quarter resulting in a trade deficit of $290.9 million.
Exports fell in the third quarter resulting in a trade deficit of $290.9 million.

South Africa Exports Fall, Current A/C Deficit Widens

South Africa Exports Fall, Current A/C Deficit Widens

The current account deficit widened in the third quarter of the year as exports of South Africa’s mining and factory products fell due to weaker international demand and a stronger rand.
The gap on the current account widened to 4.1% of gross domestic product in the three months to September 30 from a revised 2.9% in the preceding quarter, the Reserve Bank said in its December quarterly bulletin, IOL reported.
Market expectations were for a shortfall of 3.6%. Exports fell during the quarter, resulting in a trade deficit of R4 billion ($290.9 million) compared with a revised surplus of R48 billion in the second quarter, the Reserve Bank said. It said the deficit in the current and trade accounts were due to weaker global demand for the country’s goods.
“Export earnings were also affected by the strengthening in the exchange value of the rand which more than offset the benefit arising from higher international commodity prices,” the Reserve Bank said.
The rand extended its losses in response to the data, falling 0.75% to R13.745 per dollar.
The central bank said fixed investments by companies decreased for a fourth consecutive quarter, declining 1% after a 6.8% fall in the previous quarter as private businesses in particular cut down on spending.
 Decline
The prolonged decline in real capital expenditure by private businesses—comprising nearly two-thirds of total capital investment—was driven by subdued economic conditions and low business confidence, the bank noted.
South Africa’s economy relies mainly on foreign investment in stocks and bonds to help fund the deficit.
While the country averted a credit rating downgrade to junk this month, foreigners have been net sellers of South Africa’s debt and equity since the start of the fourth quarter.
That was due to increased emerging market uncertainty after the election of Donald Trump as US president and bets the Federal Reserve will accelerate the pace of interest rate increases.
Domestically, political turmoil also spooked investors. Foreign direct investment in the third quarter was R7 billion, compared with R8.6 billion in the preceding months.
This was mainly in the form of loans by foreign holding companies to their South African subsidiaries, the Reserve Bank said.
Investment in South African stocks and bonds recorded inflows of R38.8 billion in the second quarter as investors looked for higher yielding securities.

 

Short URL : https://goo.gl/4wZYNO
  1. https://goo.gl/Hi3y9A
  • https://goo.gl/7Us4Jm
  • https://goo.gl/pBDG5V
  • https://goo.gl/MOqYU3
  • https://goo.gl/vK0ZW8

You can also read ...

Big Data, Online Markets Can Lead to Higher Prices
Information technology is not just transforming markets; it is...
Italy could set the stage for the bloc’s next crisis if it delivers on its tax-cutting and high-spending policies.
Capital investment in 24 of the EU’s 28 member states has...
Liu He (L) and Steven Mnuchin after the joint statement to avoid a trade war.
With "minutes to midnight", the great US-China trade war...
A meeting of eurozone finance ministers is set for June 21.
Greece’s creditors have agreed a program of reforms as the...
Air India Sale Hangs in Balance
Uncertainty hangs over the Indian government's plans to sell...
Egypt Gets Bids for Power Plant
Egypt next week will announce the winning consortium to build...
Bangla Trade Deficit Doubles
Bangladesh’s trade deficit has almost doubled within 12 months...
Qatar March IPI Decreases Marginally
Qatar’s monthly industrial production index for March 2018...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus