South African Trade Gap Narrows as Iron Ore Exports Surge
Wednesday, 02 May 2012 | 11:00
South Africa’s trade deficit narrowed for a second month in March as coal and iron ore exports to Asia surged, the South African Revenue Service said.
The shortfall eased to 5.5 billion rand ($710 million) from 7.5 billion rand in February, the Pretoria-based South African Revenue Service said in an e-mailed statement today. The median estimate of eight economists in a Bloomberg survey was for a deficit of 5 billion rand.
South Africa has boosted exports of coal and iron ore to meet rising demand from Asian markets, including China, the world’s biggest coal consumer. Last month’s improvement in exports may help to narrow the current-account deficit, the broadest measure of trade of goods and services, underpinning the rand.
Exports rose 9 percent to 61.3 billion rand in March from the previous month, led by a 25 percent, or 3.5 billion rand, surge in coal and iron ore shipments, the revenue service said. Imports advanced 4.8 percent to 66.8 billion rand as machinery shipments rose 12 percent, or 1.6 billion rand.
The current-account gap eased to 3.6 percent of gross domestic product in the fourth quarter from 4.1 percent in the previous three months, the central bank said on March 19. The deficit will probably reach 4.3 percent this year, according to the government.
South Africa relies on foreign investment in stocks and bonds to finance the current-account deficit, inflows that have fluctuated this year as slower economic growth led investors to sell riskier, emerging-market assets. The rand has strengthened 3.5 percent against the dollar this year and was trading as high as 7.7259 today.
The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.
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