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South Africa's current account deficit narrowed more than expected in the first quarter as exports rose slightly and imports fell due to weaker demand.
The current account deficit, the broadest measure of trade in goods and services, narrowed to an annualised rate of 1.2 per cent, or R84.6 billion, from a revised 2.3 per cent of gross domestic product (GDP) in the previous quarter, the South African Reserve Bank said in a statement on Thursday.
The median forecast of seven economists surveyed by Bloomberg was a gap of 1.6 percentage points of GDP.
The full-year trade surplus widened to R183.4 billion from R90.9 billion in the fourth quarter, central bank data showed.
Uncertainty over the election and a quarterly economic contraction weighed on import demand.
The Reserve Bank said the smaller-than-expected deficit was also due to improved terms of trade, with the rand price of exports and services rising more than imports.
The better-than-expected data could help the rand, which remains unstable after the ANC lost its nationwide majority in the May 29 general election for the first time since 1994.
Markets would prefer the ANC to align with the centrist DA rather than with left-wing parties such as the Economic Freedom Fighters and former president Jacob Zuma's Umkhonto weSizwe party.
But the ANC's working committee on Wednesday recommended party leaders form a national unity government that would include multiple parties.
The ANC's top leadership is currently meeting near Johannesburg.
The country's eighth consecutive year of current account and headline budget deficits (Treasury expects the budget deficit this year to be 4.5% of GDP) are key risks for South Africa and increase its vulnerability to external shocks.