It has emerged that SA’s trade balance moved from a deficit of R7 billion in the third quarter of 2016 to a surplus of R56 billion in the fourth quarter.
This is according to the March 2017 Quarterly Economic Review of the South African Reserve Bank.
According to the review, the move in SA’s trade balance reflected an increase in the export earnings of domestic producers amid improved foreign demand for domestically produced goods and higher prices of selected commodities.
As the domestic demand for foreign-produced goods, in particular intermediate goods, slowed for the second consecutive quarter, it triggered a contraction in the value of merchandise imports in the fourth quarter, the review identified.
“On an annual basis, the trade balance improved markedly to a surplus of R15 billion in 2016 from a deficit of R38 billion in 2015. The improvement in 2016 reflected both a narrowing in the trade deficits with Europe and Asia, and a widening trade surplus with Africa.
“The improvement in the trade balance coincided with a narrowing of the shortfall on the services, income and current transfer account, from R159 billion in the third quarter of 2016 to R132 billion in the fourth quarter.
“Accordingly, the deficit on the current account of the balance of payments narrowed from R166 billion to R76 billion over the same period.
“As a ratio of GDP, the deficit narrowed from 3.8% in the third quarter of 2016 to 1.7% in the fourth quarter. For 2016 as a whole, the ratio narrowed to 3.3% from 4.4% in 2015,” read an excerpt from the Quarterly Economic Review report.
The report further divulged that the after the “notable decline” of 6.4% in the third quarter, the value of merchandise exports increased by 3.7% in the fourth quarter of 2016
BuzzSouthAfrica gathered that the fourth-quarter increase reflected the higher export value of mining products which in no small manner, compensated for a decrease in the value of exported manufactured goods.
“Following a brief contraction in the third quarter of 2016, the value of mining exports rebounded strongly in the fourth quarter, largely due to an increase in the export earnings of mineral products, mainly iron ore and coal.
“Apart from the rise in the international prices of these commodities in the fourth quarter of 2016, a surge in the value of coal exports also reflected the continued recovery in the volume of exported coal following the brief maintenance shutdown of the Richards Bay coal export line in the third quarter.
“The volume of exported iron ore increased by approximately 11% in the fourth quarter of 2016, buoyed by stronger demand for the mineral from China, Japan, South Korea and the Netherlands,” buttressed the report.