SA’s current account swings into huge surplus in Q3

South Africa’s current account swung into a huge surplus in the third quarter, as exports jumped following the easing of coronavirus restrictions, central bank data showed on Thursday.

South Africa shut down much of its economy at the end of March in one of the world’s strictest lockdowns. The curbs, which disrupted its ports, have been gradually lifted.

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The current account recorded a surplus of 5.9% of gross domestic product (GDP) in the third quarter from a deficit of 2.9% of GDP in the previous three months.

As a percentage of GDP, the surplus was the highest since the third quarter of 1988.

The rand value of the current account surplus – at R297.5 billion ($19.88 billion) in the third quarter – was more than four times the size of the previous largest surplus of R63.4 billion, recorded in the first quarter of 2020.

The trade balance showed a wider surplus of R453.58 billion in the July-September quarter, versus a R71.40 billion surplus in the previous three months.

“South Africa’s export volumes bounced back in the third quarter of 2020 in step with global trade, following the easing of Covid-19 lockdown restrictions and the related rebound in economic activity,” the central bank said in a statement.

“The improvement in the trade balance resulted from the value of merchandise exports increasing substantially more than imports.”

Source: moneyweb.co.za