South Africa's current account deficit widened more than expected in the fourth quarter of 2023 due to dividend and interest payments.
The overall current account deficit, the broadest measure of trade in goods and services, was an annualized deficit of 2.3% of gross domestic product, or R166 billion ($8.8 billion), up from a revised 0.5% of GDP in the previous quarter. expanded to. said the South African Reserve Bank in a statement on Thursday.
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The median forecast of eight economists polled by Bloomberg was for a shortfall of 1.2% of GDP. South Africa has now recorded seven consecutive quarters of a current account gap.
This deficit resulted in a full-year shortfall of 1.6% of GDP, the largest in four years.
The lower-than-expected quarterly deficit was primarily due to a larger shortfall in services, revenue and current account balances of R253.7 billion in the fourth quarter compared to R215.4 billion in the previous three months. It is.
The central bank said the increase was due to a widening deficit in the primary income account due to “increased dividend payments across companies.” The outflow from the account was the largest since the second quarter of 2022.
After the release of the statistics, the rand expanded its gains, gaining almost 0.3% against the US dollar. The dollar was trading at 18.78 rand in Johannesburg as of 1:56 p.m.
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key insights
- Trade surplus in the fourth quarter narrowed to R88.1 billion from R181.1 billion in the previous three months
- The trade surplus narrowed as the value of goods imports exceeded the value of goods exports, causing the full-year figure to shrink from 3.4% of GDP to 1.5% in 2022.
- Terms of trade, including gold, deteriorated further in the quarter as the rand price of imported goods and services rose more than exported goods.
- Annualized terms of trade are also deteriorating due to the rise in import prices
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