South Africa Has Longest Trade-Surplus Run in Six Years in July

JOHANNESBUGH (Capital Markets in Africa) – South Africa had a surplus on its trade balance in July, the longest run of positive readings since 2011.

The 9 billion-rand ($689 million) surplus compares with June’s revised 10.6 billion-rand surplus, the Pretoria-based South African Revenue Service said in an emailed statement Thursday. The median of nine economists’ estimates was for 7.1 billion rand.

The surplus eases pressure on the current account, the broadest measure of trade in goods and services, while also boosting the rand, which has gained 5.4 percent to the dollar this year despite political turmoil that’s seen the nation lose investment-grade status on its foreign-currency debt and as the economy suffers through the second recession in almost a decade.

“The surplus should continue for at least the next six months,” Elize Kruger, a senior economist at NKC African Economics, said by phone from Johannesburg before the release of the date. “The dismal local-demand conditions will also continue to be with us until the end of the year at least, if not longer.”

Exports declined 8.7 percent to 93.1 billion rand from a month earlier, while imports were 8 percent lower at 84.1 billion rand, the revenue service said. Shipments of precious metals dropped 21 percent. Imports of mineral products plunged 27 percent.

The current-account deficit narrowed to 3.3 percent from gross domestic product last year and the Treasury said in February the shortfall will probably be 3.9 percent this year. The trade surplus for the year so far is 36.6 billion rand, compared with a 4.7 billion-rand deficit in the same period 12 months earlier.

The rand has been the most volatile among major and emerging-market currencies tracked by Bloomberg this year. The central bank reduced its growth forecast for Africa’s most-industrialized economy this year to 0.5 percent from 1 percent, and trimmed its 2018 estimate to 1.2 percent from 1.5 percent.

The rand weakened 0.2 percent to 13.0611 per dollar by 2:14 p.m. in Johannesburg on Thursday. The yield on rand-denominated government bonds due December 2026 was little changed at 8.59 percent.

The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.