The Johannesburg Stock Exchange. File picture: Siphiwe Sibeko
JOHANNESBURG - South Africa’s balance of trade recorded a surplus of R431.4million in February, the smallest surplus since November 2015, but a recovery from the deficit of R27.1billion in January.

February’s surplus defied the consensus forecast of a R3bn deficit. However, excluding trade with Botswana, Lesotho, Namibia and Swaziland, the trade deficit in February was R6.6bn.

February’s surplus was lower than the surplus of R4.12bn in the same month last year.

Cobus de Hart, an analyst at NKC African Economics, said the disappointing trade performance in February signalled a potential drag on gross domestic product (GDP) growth in the first quarter, unless March’s trade performance surprises on the upside.

“The trends evident in this release will likely continue (higher exports and lower imports), and it should, over the coming months, boost the trade account, although it seems likely that net exports could turn out to be a drag on quarter one GDP,” De Hart said.

“We forecast a slightly wider current account deficit of 2.8percent of GDP for 2018, compared to deficit of 2.3percent of GDP in 2017.”

The SA Revenue Service said exports rose 12percent month-on-month to R90.6bn, primarily on the back of strong growth in the vehicles and transport equipment category.

In the year to February 28, exports grew 3.1percent compared with the same period last year, from R166.28bn to R171.45bn. Imports increased 14percent, from R173.88bn in January and February 2017 to R198.14bn in the same period this year, resulting in a cumulative trade balance deficit of R26.69bn for 2018.

“The size of the trade account should remain muted this year as domestic economic activity recovers, albeit at a moderate pace, following recent positive events, including the avoidance of a sovereign credit downgrade by Moody’s, a fiscal-friendly Budget and more perceived policy and political certainty,” Lara Hodes, an economist at Investec, said.

South Africa’s exports to the rest of Africa increased by R3.1bn in January to R25bn, compared with imports of R10bn, leaving a surplus of R15bn.

The country had a trade deficit of R14.3bn with Asia, a deficit of R6.9bn with Europe, and a deficit of R107m with Oceania.

Credit up

Meanwhile, the SA Reserve Bank said private sector credit increased by 5.74percent in February compared with the same month last year, beating market consensus of a 5.5percent rise. Private sector credit grew 5.54percent in January.

Corporates’ credit exposure increased by R32.1bn, compared with a decline of R19.9bn in January.

Elize Kruger, an analyst at NKC African Economics, said stricter lending criteria enforced by the National Credit Act and high consumer indebtedness continued to put a strain on the credit environment.

“However, improved confidence following recent political developments has the potential to ignite the willingness of consumers and corporates to increase credit exposure, which could contribute positively to economic growth,” Kruger said.