South Africa posted a larger-than-expected trade deficit in March as the protracted strike in the platinum group metals (PGM) sector – which produces South Africa’s largest export commodity – shows no sign of ending.
Trade data published by the South African Revenue Service (Sars) on Wednesday showed a trade deficit of R11.4-billion in March – a jump from February’s downwardly revised (initially R1.7-billion) R600-million surplus.
BNP Paribas Cadiz Securities economist Jeffrey Schultz said a deficit of between R1.5-billion and R5-billion was expected.
Sars reported a 3% month-on-month fall in exports to R80.3-billion, while imports jumped 11.6% month-on-month to R91.7-billion.
“Underpinning the sharp uptick in imports was a 77% month-on-month rise in vegetable product imports; a 13% climb in machinery and electronics; a 37% increase in mineral products and a 9% rise in vehicle and transport equipment imports,” Schultz noted.
Investec economist Annabel Bishop attributed the rise in imports to a R7.2-billion jump in oil imports as “expensive oil-powered generators” were relied upon to provide power to the grid in peak periods.
This had negatively impacted trade, with the months of March and April experiencing limited spare electricity capacity as generating units were shut down to undertake preventive maintenance ahead of the winter months.
“Electricity constraints have required South Africa’s large industrial companies (foundries, smelters, mines) to either temporarily shut down or cut back on 20% of production, well above the 10% previously requested … [ a move that would likely] negatively impact first-quarter economic growth,” she said. [….]
South Africa Today – South Africa News
