May trade balance seen at R2.5bn deficit

29 Jun 2010

South Africa's foreign trade balance with its non-Southern African Customs Union (Sacu) trading partners is expected to have reached a R2.5 billion deficit in May from the R1.9 billion deficit of April, according to a survey by I-Net Bridge.

A record R17.4 billion deficit was set in January last year, but a few surprise surpluses have been registered since then.

One of the participants in the survey said that trade data for May could be difficult to read, as both exports and imports are likely to have been cut by the Transnet strike, which affected trains and ports for three weeks during the month.

The economist added that while the transport utility put contingency plans in place to minimise the impact of the strike, there were numerous reports of distortions in several sectors.

However, South Africa's bulk export volumes have surprised on the upside with their strongest gain since July last year of 29.96% year-on-year (y/y) in May.

This data is important as it suggests strong exports in the foreign trade data due to be released on Wednesday.

It is also indicative of the growing demand for SA goods from offshore, a good sign when it comes to the economic recovery, currently running at 4.6% in the first quarter.

Forecasts among the eight leading economists surveyed varied from a R3.1 billion deficit to a R1.0 billion deficit.

South Africa's Customs and Excise Department is set to release the latest foreign trade data at 2pm on Wednesday, 30 June 2010.

Source: I-Net Bridge

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