(Bloomberg) -- South Africa’s current-account deficit was slimmer than expected in the third quarter after its trade surplus narrowed only slightly and the shortfall on the services, income and current transfer account was the smallest it’s been in a year.
The gap on the current account — the broadest measure of trade in goods and services — shrank to an annualized 1% of gross domestic product, or 70.8 billion rand ($3.9 billion), from a revised 1% of GDP, or 75.3 billion rand in the prior quarter, the South African Reserve Bank said in a statement on Thursday.
The median estimate of three economists in a Bloomberg survey was for a deficit of 1.7% of GDP. South Africa has now posted a current-account shortfall for a 10th straight quarter.
“We now forecast a modest narrowing of the current account deficit from 1.6% of GDP in 2023 to 1.3% of GDP in 2024, given the weaker performance of the economy,” Goldman Sachs Group Inc economist Andrew Matheny wrote in a note to clients. “We maintain our forecast for a widening of the current account deficit to around 2% of GDP in 2025 as growth picks up.”
The annualized trade surplus narrowed to 177 billion rand from 179.5 rand in the second quarter, driven by a drop in the value of goods exports, which declined more than merchandise imports, the central bank said.
“The decrease in the value of exports and imports of goods and services in the third quarter of 2024 reflected both lower volumes and prices,” the Reserve Bank said.
The drop in the value of exports was driven by net gold shipments, which fell to 139 billion rand from 151 billion rand, the central bank data showed.
The rand traded 0.65% weaker at 18.05 against the dollar by 1:01 p.m. in Johannesburg. The currency, a bellwether for emerging markets, has been under pressure since Donald Trump won the Nov. 5 US elections as investors bet his pledge to raise tariffs and cut taxes will prompt the Federal Reserve to lower rates less than it had forecast, boosting the US currency.
--With assistance from Simbarashe Gumbo and Paul Richardson.
(Updates with more details in paragraph one and rand movement in sixth paragraph)
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