JOHANNESBURG (Reuters) – South Africa’s current account deficit widened to 2.3% of gross domestic product in the second quarter from a revised 0.9% in the first quarter, central bank data showed on Thursday.
In rand terms, the current account balance for the April-June period recorded a deficit of 160.7 billion rand ($8.36 billion) from a revised 63.7 billion rand deficit in the preceding three months.
The trade surplus narrowed to 31.1 billion rand in the second quarter of the year from 110.6 billion rand in the first quarter.
“The increase in the value of imports of goods and services mainly reflected higher volumes while the decrease in exports of goods and services reflected lower prices,” the South African Reserve Bank said in a statement.
South Africa’s weakening fiscal position due to low growth, lower commodity prices, sustained imports for renewable projects and exchange rate fluctuations widened its current account deficit, Nedbank economists said in a note this week.
The current account deficit or surplus is measured as a percentage of GDP and reflects a country’s international transactions with the world.
The National Treasury had projected a current account deficit of 1.8% of GDP in its February budget.
Economists have also highlighted that higher wages and poor revenue collections would impact the country’s budget deficit this year.
A downward revision to gross domestic product growth forecasts and other key metrics is expected in the medium-term budget policy statement in October.
($1 = 19.2214 rand)
(Reporting by Kopano Gumbi; Editing by Promit Mukherjee)