Johannesburg - South Africa’s current-account deficit widened to 6.5 percent of gross domestic product in the second quarter as a weakening rand failed to damp imports and boost exports.
The gap on the current account, the broadest measure of trade in goods and services, grew to an annualised 216.2 billion rand ($21.7 billion), the Reserve Bank said in its Quarterly Bulletin, released today in the capital, Pretoria.
The median estimate of 15 economists surveyed by Bloomberg was for the deficit to widen to 6.2 percent of GDP from 5.8 percent in the first three months of the year.
“South African exporters did not benefit notably from the somewhat more favourable global economic environment,” the central bank said.
“Manufacturing export quantities contracted in the second quarter of 2013, while mining and agricultural export volumes edged higher over the same period. A marked decline was recorded in the subcategory for vehicles and transport equipment.”
South African exports have come under pressure amid a slump in demand from Europe and strikes in the mining industry that have disrupted output and undermined growth in the continent’s biggest economy.
That’s contributed to the rand’s 15 percent plunge against the dollar this year, the worst performer among 24 major emerging-market currencies tracked by Bloomberg.
The average dollar price of South African commodities, excluding gold, dropped 8 percent in the second quarter compared with an 8.7 percent gain in the previous three months as demand for metals from China waned, the central bank said.
The country has the world’s largest-known reserves of platinum, used in the automotive industry, and chrome. It’s also the sixth-biggest gold producer.
South Africa relies on inflows from abroad into its bond and stock markets to fund the current-account gap.
Foreigners were net buyers of 24 billion rand of the nation’s bonds so far this year, compared with 93.5 billion rand for the whole of 2012.
The rand declined for the first time in five days, dropping 0.2 percent to 9.9730 per dollar by 8:29 a.m. in Johannesburg.
Demand in the South African economy is also slowing amid a slump in global spending.
Gross domestic expenditure, which includes spending by consumers, the government and businesses, rose 2.7 percent last quarter compared with 3.5 percent expansion in the first three months of the year, the central bank said. - Bloomberg News