Johannesburg - South Africa's currency and equities markets slumped on Tuesday after revised figures showed the country's current account in late 2012 was worse than first thought.
The South African Reserve Bank revised the third quarter deficit up to 6.8 percent of gross domestic product and reported that it hit 6.5 percent of GDP in the final quarter of the year.
Shortly after the news, the Johannesburg Stock Exchange's All Share Index fell by a third of a percent, but recovered slightly before the close.
The dollar rose by 0.8 percent against the rand meanwhile, with one greenback fetching 9.1810 rands, though it later trimmed those gains.
But the figures will only add to the pressure on the South African economy, which is already struggling under a toxic mix of slow growth and high prices.
South African Reserve Bank governor Gill Marcus recently expressed concerns that the rand weakness was “overdone”.
The continued weakness of the South African currency risks fuelling price inflation, which is already hurting poorer consumers.
With inflation approaching six percent, it is also brushing the upper end of the central bank's own inflation band, leaving little room for the bank to stoke growth by cutting interest rates.
Analyst Peter Attard Montalto of Nomura warned the worst might be still to come with deficits set to rise further, and added: “The currency is still very much overvalued.
“We think the first quarter deficit could be as large as 7.3 percent of GDP,” or gross domestic product, he told clients in a research note.
“In the fourth quarter there were actually outflows of net (foreign direct investment) thanks to divestment by foreign companies.”
Confidence in Africa's largest economy has cratered owing to deadly mining strikes and slow implementation of policies designed to bring down unemployment and boost growth. - Sapa-AFP