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JOHANNESBURG - South Africa’s current account deficit narrowed by R18.3billion to R190.3bn in the third quarter from R208.7bn in the second quarter, the SA Reserve Bank (Sarb) said yesterday. 

As a ratio of gross domestic product (GDP), the current account deficit narrowed to 3.7percent in the third quarter from 4.1percent in the second. Analysts said the deficit for the quarter was wider than the market consensus of negative 3percent. 

However, trade balance switched to a surplus of R41.1bn from a deficit of R31.8bn in the previous quarter as the value of merchandise exports increased while that of imports declined. 

The trade balance has been in surplus territory for the past two readings, most recently rising to a surplus of R5.2bn in September, the largest surplus this year. 

The import of goods and services decreased by 6.8percent quarter-on-quarter on lower volumes and prices as demand weakened and GDP contracted by 0.6percent. Sarb said the higher value of merchandise exports reflected increases in volumes and prices, while lower volumes and prices weighed down the value of imported goods. 

The shortfall on the services, income and current transfer account widened to R231.4bn in the third quarter, from R176.9bn in the second. Investec chief economist Annabel Bishop said that although the current account deficit was wider than the consensus, the rand had largely shrugged it off, driven by the seasonal global risk. She said the rand/oil price had fallen by minus 7.3percent in the third quarter compared with the previous quarter, with oil a key import for South Africa, aiding the trade account into surplus.