PRETORIA, South Africa's current account deficit has widened to 2.1 per cent of the gross domestic product (GDP) in the first quarter of 2017 from 1.7 per cent of GDP in the previous quarter, says the central bank.
The deficit on the current account of the balance of payments widened from 76 billion Rand (about 5.81 billion US dollars) in the final quarter of 2016 to 92 billion Rand in the first quarter of 2017. As a ratio of GDP, the deficit widened somewhat from 1.7 per cent to 2.1 per cent over this period, according to the June Quarterly Bulletin of the South African Reserve Bank released on Tuesday.
South Africa's trade surplus was sustained for a second consecutive quarter, widening marginally from 56 billion Rand in the fourth quarter of 2016 to 57 billion Rand in the first quarter of 2017. According to the Bank, the higher surplus resulted from a slight increase in the value of net gold and merchandise exports which more than fully offset the marginal increase in the value of merchandise imports.
The broadly unchanged trade surplus occurred alongside a widening of the shortfall on the services, income and current transfer account, from 132 billion Rand in the fourth quarter of 2016 to 149 billion Rand in the first quarter of 2017, said the Bank.
The current account deficit came in lower than market expectations with Nedbank economists saying the current account deficit is likely to widen further in the coming quarters as domestic demand rises, albeit at a moderate pace. They expect the domestic economy to return to modest growth in the coming months.
The domestic economy is expected to return to modest growth in the quarters ahead, mainly supported by the recoveries in agriculture, mining and manufacturing sectors.
Source: NAM NEWS NETWORK