The R18 billion drop in monthly exports only dampens some of the glamor. Between January and July, exports rose 45% to over one trillion rand, from 716 billion rand during the same period in 2020. It could have been even better without the July looting, but Analysts believe commodities still have legs and South Africa’s current account will remain healthy for the remainder of 2021.
“The substantial drop in July’s export figure can be largely attributed to the unrest in KwaZulu-Natal which caused disruption in the port of Durban, while the cyber attack that crippled Transnet’s port operations also had a negative impact. severe impact, ”said Pieter du Preez of NKC African. Economy.
“The high commodity price environment will continue to boost exports. We expect commodity prices to remain at current levels in the near term, before starting to decline in the medium term. As a result, we expect the current account to remain in surplus territory this year, before returning to deficit territory in the second half of 2022, ”said Du Preez.
South Africa experienced its largest ever trade surplus, now reaching R 290 billion cumulative, supported by soaring global commodity prices as major economies such as China and the United States, as well as the European economies, are accelerating their activities and investing massively in the construction of infrastructures in order to shake off the slowdown induced by the Covid-19.
However, the impact of the riots and the cyberattack tarnishes the rosy picture that the commodities boom has painted for South Africa’s attempted economic recovery.
As a result of the boom, the National Treasury received healthier-than-expected tax revenues, mostly from mining companies, and although it used part of this windfall to fund a 38 billion rand, he has held up by committing to ongoing spending increases in part out of fear the resource party might not last forever, but also out of fear of disrupting investors who are closely watching the Treasury’s ability to keep up. its promises to lower the budget deficit and the public debt.
“TThe large cumulative trade surplus this year supports a constructive outlook for a current account surplus. Therefore, we expect the current account to register a surplus of around 1.9% of GDP for 2021 against a surplus of 2.0% of GDP in 2020. Nonetheless, we are concerned about supply constraints. global and high transportation costs, limiting foreign trade activity, ”said Thanda Sithole, FNB economist.
South Africa releases second quarter GDP data next Tuesday. BM / DM