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The trade deficit narrows, but was wider than expected

by , 31 March 2015

Earlier today, the South African Revenue Service (SARS) released its trade account data for February.

The data showed that the deficit narrowed significantly from January. This was thanks to a strong rise in exports.

But the trade deficit was higher than economists predicted.

Let's take a closer look at what the data showed…

The trade deficit for February was R8.48 billion

SARS revealed that the “trade deficit narrowed to R8.48 billion in February,” reports Fin24. This is markedly down from January’s deficit of R24.22 billion.

But economists were expecting the deficit to have narrowed to R6.35 billion for the month, notes BDLive.

In January, the trade deficit swelled thanks to a sharp fall in exports over the month against a sharp rise in imports. The rand weakened by more than 1% on the news.

This brings the trade deficit for January and February this year to R32.7 billion, says Bloomberg. That’s over double the deficit for the same period last year of R15.5 billion.

Imports still outweigh exports

In February, exports came in at R76.85 billion, reports BDLive. An increase of 14.6% from January. In terms of imports, they totalled R85.33 billion and fell 6.5% from the month before.

Helping imports fall was a stark reduction in the import of oil, which fell 22%, adds Bloomberg. This as the international oil price rose from mid-January.

The deficit came from South Africa’s “trade with the US, Asia and Europe,” notes BDLive. There was a trade surplus for “trade with the rest of Africa”.

So positive news that the deficit fell significantly after it hit a high in January. But the deficit was still higher than forecast and shows that SA still imports more than it exports.

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The trade deficit narrows, but was wider than expected
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