SA imports defy gravity

Alan Peat
THERE IS no definite answer to a question often posed to FTW by readers in recent times: "How has the slump in the rand in the last year affected imports and exports?"
Three economists questioned by FTW declined to comment - and their feelings were summarised in the statement by Standard Bank's Goolam Ballim: "There is no clear correlation between the rand's decline, and movement in imports and exports."
But he left it as understood that - with the rand having declined by 20% in the last year on a trade weighted basis - there has been an effect.
"But we have been defying gravity for some time now.
"Imports - despite all sorts of exchange rate and global economic slowdown pressures - have not declined as precipitously as exports have increased."
And, with a lot of importers having forward cover, Ballim expects a time-lag between the recent economically unsettling times and the onslaught of downward pressure on SA import volumes.
"There are also still significant capital projects - in mining and telecommunications, for example - which require foreign-sourced equipment and materials.
"These do not stop because of the decline in the rand exchange rate."
And Ballim's forecast is that - in the short-term - SA will continue to defy gravity, but at a slowing pace.