Filomena Scalise

The deficit on SA’s current account widened more than expected to 6.4% of gross domestic product (GDP)‚ or -R200bn‚ in the second quarter‚ from a 4.9% deficit‚ or -R152.5bn‚ in the first quarter‚ the Reserve Bank’s September quarterly bulletin released on Tuesday showed.

These are seasonally adjusted annualised figures.

SA has been affected‚ along with other open economies‚ by the slowdown in global demand for commodities.

A survey of eight leading economists by I-Net Bridge had forecast a current account deficit of 4.9% of GDP. A current account deficit occurs when a country's imports of goods‚ services and transfers is greater than its exports of goods‚ services and transfers.

The current account deficit for 2011 as a whole was 3.3% of GDP.

The bulletin noted that the moderation in export earnings coincided with a further increase in the value of merchandise imports‚ resulting in the deficit on the trade account of the balance of payments increasing significantly from R42bn in the first quarter to R75.7bn in the second quarter.

The shortfall on the service‚ income and current transfer account widened notably‚ aggravated by higher dividend payments to the rest of the world.

This shortfall‚ the bulletin showed‚ was further exacerbated by higher payments for transportation services‚ which increased in tandem with higher import volumes.

This meant the deficit on the service‚ income and current transfer account with the rest of the world widened from R110.5bn in the first quarter to R124.3bn in the second quarter‚ which was equal to 4% of GDP. - I-Net Bridge