Johannesburg‚ Jan 31 (I-Net Bridge) - South Africa’s trade account recorded a deficit of R2.7bn in December from a deficit of R7.9bn in November for its trade with non-Southern African Customs Union (non-SACU) trading partners‚ SARS customs and excise data showed on Thursday.

The cumulative deficit for the year was R117.675bn compared to a cumulative deficit of R16.885bn in 2011.

Following are economists’ reaction to the data:

COLEN GARROW: economist at Meganomics:

“This was relatively better than the past few months‚ but is unfortunately not sustainable. The weaker rand should lead to a better balance between exports and imports this year‚ but the large current account deficit will keep pressure on the rand for the moment.”

ELNA MOOLMAN: Economist at Renaissance Capital:

“As usual‚ this was owing to a seasonal decline in both imports and exports‚ with imports falling more than exports. The import decline was dominated by lower machinery imports‚ while the export decline was dominated by the decline in base metals exports.

“This is the first time since December 2008 that SA recorded a trade deficit in December – usually there is a seasonal improvement that yields a surplus during the holiday period.

“This concludes the trade deficit data for 2012‚ with the deficit widening to R117.7bn from a deficit of R16.9bn in 2011. We expect some improvement in the trade and current account balances in 2013 owing to an expected recovery in mining production and exports (as the impact of the 2H12 strikes fade and assuming that they are not repeated)‚ while the weaker rand and weaker domestic demand growth should also help to contain import growth. However‚ the current account will in our view still remain wide enough to weigh on the rand‚ and we are somewhat more bearish about the outlook for the rand in the medium- to longer-term than the consensus.”

MARK KALKWARF: Senior portfolio manager at the Iquad Group:

“Very much in line with expectations of –R2.5bn. This was largely influenced by a sharp decline of 15.8% in imports on a month-on-month basis. The cumulative deficit for the 2012 calendar year was sharply up at R117.7 bln from a deficit of R16.9 bln for the 2011 calendar year.

“ Of note is that imports of machinery‚ equipment components and chemical products were down. This could indicate that factories are not looking to expand in the short-term‚ which could be related to a negative impact on growth. Very little impact on the currency with the rand trading 50bps stronger against the USD post the data. Foreigners buying back into high-yield bonds keeping the rand on the front foot.” - I-Net Bridge