Trade deficit expected to narrow

While we still await the figures, the trade deficit is expected to narrow in August – and, according to the Standard Bank economics team studying the issue, they “have pencilled in a trade deficit of R5.2-billion” for the month. This would compare favourably with the July data – when the trade deficit widened substantially to its secondhighest monthly amount of R14.33-bn. In that month, exports performed reasonably well, increasing to R61.268- bn from R60.160-bn in June. But the monthly trade deficit emanated from imports, the team added, improving by 25.3% on the month – and rising to a phenomenal R75.6-bn in July from R60.34-bn in June. This was the highest level of imports ever recorded. July’s mineral product bill (dominated by oil imports) marked the highest level for this category on record. The bill was lifted by the price of oil at an average price of US$134/ barrel for the month, although it kicked off July at a record high of US$146/bl. Looking forward, the Standard team identified another bout of rand weakness evident in August, which, they told FTW, “may have welcoming effects on the August trade data and going into the final months of the year”.