South Africa’s current account deficit narrows as exports pick up

PRETORIA (Reuters) – The shortfall on South Africa’s current account deficit narrowed more than expected in the final quarter of 2014 as exports rose on reduced strike activity and improved conditions in some export destinations, the central bank said on Tuesday.In its latest quarterly bulletin, the South African Reserve Bank said the more competitive exchange value of the rand during the fourth quarter had also helped ease the deficit.The deficit shrank to 5.1 percent of GDP from a revised 5.8 percent in the third quarter. The trade balance improved to a 35 billion rand ($3 billion) shortfall from 77 billion rand.On a year-on-year basis, the deficit on the current account was narrower at 5.4 percent of GDP in 2014, compared to 5.8 percent in 2013.The rand firmed against the dollar after the data was released, reaching a session high of 12.3550 at 0803 GMT.Pronounced increases in exports of platinum group metals, as well as coal and iron ore, were the main contributors to the uptick in exports volumes, while electricity constraints saw a decline in the export of copper and aluminum, the bank said.The export of manufactured goods also rose in Q4 of 2014, for a second consecutive quarter, according to the bank.Spending grew at an annualised 0.3 percent in the fourth quarter of 2014 after rising 3.2 percent previously, with slowed government spending offsetting accelerated growth in household spending.Spending by government increased at an annualised 1.0 percent, while spending in households ticked up grew at an annualised 1.6 percent, the bank said.($1 = 12.3890 rand)