JOHANNESBURG – South Africa’s finances deteriorated further in the second quarter as the current account swung from a surplus in the prior quarter to a deficit, with Moody’s warning that the recent economic downturn would intensify the government’s fiscal woes, particularly its ability to generate the required revenue.
The South African Reserve Bank (SARB) said on Thursday that the country’s balance of trade halved from a surplus of R20.7 billion in the first quarter to a deficit of R91.5bn in the second quarter.
SARB said the current account balance as a ratio of gross domestic product (GDP) fell to a 2.4 percent deficit from a surplus of 1.2 percent in the first.
The widening deficit comes just hours after Statistics SA (StatsSA) said that the country’s GDP contracted an annualised 51 percent during the second quarter of this year, or 16.4 percent quarter on quarter on Covid-19 restrictions.
StatsSA said that the contraction was the first conservative quarterly shrinking of the economy.