South Africa’s trade deficit turned into a trade surplus for the first time in 10 months in December 2014. Exports increased while imports of machinery and oil declined.
An email from the Pretoria-based South African Revenue Service said the trade surplus stood at 6.8-billion rand ($586 million US) compared to a revised shortage of 5.3-billion rand in November. The average estimate from 14 economists was for a surplus of roughly 1.8 billion rand.
Since June of 2014, global crude-oil prices have spiraled downwards by more than half. South Africa imported 19-percent less crude in December than in November. Estimates predicted this would help lower the country’s import bill and relieve pressure on the rand. An economist at ETM Analytics in Johannesburg said the nation had large infrastructural energy needs that could potentially offset the impact of much lower oil prices.
Throughout 2014, South Africa ran a trade deficit of more than 95 billion rand, one third higher than in 2013, according to the revenue service.
There’s a good chance the aggregate trade deficit could grow…
…Imports dropped by nearly 9.9 percent to 80-billion rand in December as the purchase of capital-intensive products like machinery and electronics dipped by 13 percent. Also in December, crude oil purchases declined by 7.5 percent. Meanwhile, exports increased by 3.8 percent, led by mineral-based products including coal and iron ore, which were up 25 percent.
Read more at EconomyWatch.