After a massive trade deficit in August of R4.7-billion, and exports again on the decline, the signs are that this negative balance is here to stay until year-end, according to Standard Bank economist, Shireen Darmalingam. The massive R4.7 billion deficit for August 2010 was due to a R7.5-bn (13.4%) decrease in exports to R48.5-bn while imports only declined by 0.8-bn (1.5%) to R53.2-bn. “The trade balance is likely to receive downside pressure by an improvement in internal demand as the domestic recovery gathers traction,” Darmalingam added. “In addition, external demand for locally produced goods could be tempered should the global economy weaken further. We therefore see trade deficits for the remainder of this year.” It’s the traditional trend in the last five months of the year anyway, analysts in the local freight and trade industries told FTW, with the “pre-Christmas boom” pushing up consumer demand – and easing interest rates another accelerator.
