ECONOMY
Imports push current account deficit up
Posted Thu, 31 Mar 2005
A sharp rise in imports caused South Africa's current account
deficit to grow by more than R14-billion in the fourth quarter of
last year, the SA Reserve Bank said on Wednesday.
Releasing the central bank's quarterly bulletin in Pretoria,
research department head Monde Mnyande described this as "something
to really worry about".
The report states that the current account deficit rose from
R43.1-billion to R57.3-billion between the third and fourth
quarters — closing the year at an overall deficit of R44.4-billion.
"A renewed sharp increase in the value of imports more than
neutralised the increased export values of goods and gold over the
period," the bulletin says.
"Robust domestic demand and the strengthening of the exchange
rate of the rand were reflected in the physical quantity of
imported goods, which advanced by no less than 16.5 percent over
the period."
A positive trade balance of R0.3-billion in the third
quarter
turned into a deficit of -R8.7-billion in the fourth.
The current account deficit was equal to four percent of gross
domestic product (GDP) in the fourth quarter, up from 3.1 percent
in the third.
Year-on-year, the figure rose from 1.5 percent of GDP in 2003 to
3.2 percent in 2004.
South Africa's highest current account deficit was recorded at
4.5 percent of GDP in 1982.
The current account reflects imports and exports as well as
trade in services, income and current transfer payments to
non-residents.
The bulletin says the value of merchandise exports, which rose
by 6.5 percent in the second quarter of last year, increased at a
far slower pace in the second half of the year — rising by only
1.5 percent from the third to fourth quarters.
Export volumes, however, increased by four percent in the fourth
quarter.
The rand prices of goods exported from South Africa decreased by
2.5 percent in the
fourth quarter. For the year, the rand prices of
exported goods rose by about three percent, and for commodity
exports by about five percent.
The value of South Africa's annualised net gold exports, which
dropped to R29.7-billion in the third quarter, rose by 18 percent
to R35-billion in the fourth, the bulletin states. The volume of
gold exports rose by 13 percent between the two quarters.
On the other side of the trade balance, the value of merchandise
imports rose for the fifth consecutive quarter. The rand value in
the fourth quarter was 24 percent higher than the corresponding
quarter in 2003.
"In the fourth quarter of 2004, the value of imported goods rose
by six percent, with increases registered in all the main
categories of imports," the bulletin says.
Sapa
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