June 30 (Bloomberg) -- South Africa’s trade deficit narrowed to 1 billion rand ($147.5 million) in May as exports of commodities, vegetables and vehicles increased.
The deficit, which was in line with the median estimate of 10 economists surveyed by Bloomberg, contracted from 2.4 billion rand in April, the Pretoria-based South African Revenue Service said in an e-mailed statement today. The shortfall narrowed to 8.5 billion rand in the year to date from 13.5 billion rand the year earlier.
The smaller gap “was underpinned by higher commodity exports, specifically precious and base metals,” the revenue service said.
The trade deficit has narrowed even as the rand’s 39 percent gain against the dollar since the beginning of 2009 constrained exports and made imports cheaper. The effect of the stronger currency was partially offset by increases in the price of gold and other metal exports.
“Exchange rate over-valuation has exacerbated pressure on our current account deficit and increased our vulnerability to future shocks,” Deputy Finance Minister Nhlanhla Nene said in a speech in Cape Town yesterday.
The shortfall in the current account, the broadest measure of trade in goods and services, expanded to 3.1 percent of gross domestic product in the first quarter from a revised 1 percent in the previous three months, the central bank said in its Quarterly Bulletin released on June 21.
Exports rose 9 percent to 56.3 billion rand in May from the previous month as shipments of precious and semi-precious stones and metals increased by 1.82 billion rand, or 14 percent, the revenue service said. Base metals exports rose 1.16 billion rand, or 15 percent, while vegetable product shipments surged 660 million rand, or 40 percent. Exports of vehicles, aircraft and vessels increased 532 million rand or 13 percent.
Imports gained 6 percent to 57.3 billion rand over the same period, mainly due to increased purchases of machinery, electrical appliances, equipment components, base metals, plastic and rubber.
Trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.
--Editors: Philip Sanders, Karl Maier
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