Pretoria - The shortfall on South Africa's current account widened more than expected in the second quarter of the year, as prolonged strikes that hit the platinum, metals and engineering sectors hit exports, the central bank said on Tuesday.
In its latest quarterly bulletin, the South African Reserve Bank (SARB) said declining commodity prices also severely dented the country's export performance.
The deficit on the current account expanded to 6.2 percent of GDP in the second quarter of the year from 4.5 percent in the first quarter, with the trade balance deteriorating to a 101 billion rand shortfall from 75 billion rand.
Having increased for five consecutive quarters, exports, excluding gold, fell in the second quarter, largely due to lower output in the platinum sector, which was hit by strikes from January to June, the bank said.
“In addition to lower supply, export volumes were also weighed down by lower demand from trading partner countries in Asia, more in particular China, India, Thailand and Malaysia,” it said.
Economists polled by Reuters last week expected the current account gap to widen to just 5.45 percent of GDP.
The rand fell to a six-month low of 10.8900 against the US dollar after the release of the data.
The central bank said South Africa's financial account had proved resilient despite a scaling back in the US Federal Reserve's asset purchasing programme.
A net 16.2 billion rand worth of portfolio investments flowed into the economy, up from 3.4 billion rand in the first quarter.
Growth in spending slowed to 1.8 percent in the second quarter from 2.7 percent, the bank said, as high levels of debt, increases in energy and transport costs, and weak employment crimped household demand.
“This slower pace of spending was consistent with a moderation in growth in the disposable income of households,” the Reserve Bank said.
Spending by the government, however, increased at an annualised 1.6 percent in the second quarter from 1.4 percent in Q1, partly due to higher wages for state workers. - Reuters