South Africa's current account deficit hits 2.6% of GDP, worst in 7 years
MacroCommodityDigital Finance
South Africa's current account swung to a deficit of 2.6% of GDP in the second quarter, or 205.5 billion rand, about 12.8 billion dollars, the widest shortfall since the third quarter of 2019 and worse than the 1.3% of GDP the market had expected, according to a Bloomberg survey of seven economists. The South African Reserve Bank said the main factor was a rapid shrinking of the trade surplus to 146.4 billion rand from 428.8 billion rand in the first quarter, as imports rose far more than exports. Exports of goods and services increased by 92.3 billion rand, but imports jumped by 376.6 billion rand. The wider-than-expected current account deficit came in the first quarter, reflecting the impact of the Iran war throughout that period, after the conflict began when the United States and Israel attacked Iran on February 28, which restricted shipping through the Strait of Hormuz and pushed up oil and fertilizer prices. Meanwhile, the deficit on the services, income and current transfers account widened to 351.9 billion rand, or 4.5% of GDP, from 247.2 billion rand, or 3.1%, in the first quarter, the highest level since the second quarter of 2022.
