Current account deficit headed in the wrong direction

South Africa’s current account deficit widened further to 4.9% of Gross Domestic Product (GDP) in the first quarter of 2012, said the Reserve Bank on Thursday.

“The deficit on the current account of the balance of payments widened from 3.6% of gross domestic product in the fourth quarter of 2011 to 4.9% in the first quarter of 2012,” said the central bank in its June Quarterly Bulletin.

The bank noted the stronger rand and a contraction in export proceeds over the period in the first quarter.

“The size of the trade deficit was exacerbated by a further deterioration in South Africa’s terms of trade, as declining commodity prices adversely affected South Africa’s export earnings,” noted the bank.

Additionally, the value of merchandise exports contracted by 2.4% in the first quarter, largely reflecting a decrease in export prices alongside a marginal contraction in merchandise export volumes.

According to the Bulletin, merchandise imports increased by 0.3% in the first quarter of 2012 following a sharp increase of 10.5% in the fourth quarter.

“The marginal increase in the value of imports in the opening months of 2012 followed an exceptionally strong increase in all major import categories in the preceding quarter. The pace of increase in the volume of imported goods moderated over the period, whereas the rand price of merchandise imports declined due to relatively subdued inflation in South Africa’s main trading-partner countries coupled with the appreciation in the exchange value of the rand.”

The current account gap was being financed by foreign capital inflows.

“This negative imbalance continued to be financed through a combination of net foreign direct investment, portfolio and other investment-related foreign capital inflows.” – BuaNews

The following two tabs change content below.

• Bio
• Latest Posts

Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE

Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.

Latest posts by Alan Straton (see all)

• CDC: The ONLY Number You Require (For Now) - 30 September 2026
• Soccer Laduma Sets Out a Bonus and Deposit Guide for SA Punters This Spring - 30 September 2026
• Alu Door & Window Centre Readies Mpumalanga Homes for the Summer Storms - 30 September 2026
• If AI Can Now Do the Work, Who Checks the Work? - 29 September 2026
• UK Music Titans Marc Marot & Jeremy Marsh Join #MEX26 in Cape Town - 29 September 2026