South Africa’s current account balance swung to a deficit in the second quarter of this year from the previous three months as the trade surplus more than halved due to the impact of the Covid-19 pandemic.
Africa’s most industrialised economy had a deficit of 2.4% of gross domestic product (GDP) on its current account balance in April-June, from a revised surplus of 1.2% of GDP in the prior quarter.
The trade surplus more than halved to R91.5 billion ($5.47 billion) in the second quarter from the R201.7 billion surplus in the previous three months.
“The adverse impact of the Covid-19 pandemic on the domestic economy was inevitable as world trade volumes continued to contract in the second quarter,” the South African Reserve Bank said in a statement.
“The deterioration in the trade balance came about as the value of merchandise exports decreased substantially more than imports,” the central bank added.
Data on Tuesday showed that South Africa’s economic output recorded its largest contraction ever in the second quarter as a strict lockdown shut down most activity.
The lockdown, which started from late March, has now been eased to allow most of the economy to function while adhering to strict health protocols.