- South Africa's current account balance widened to 5% of GDP for the first quarter of the year.
- The current account balance recorded its second largest surplus in monetary terms at R267 billion.
- Trade surpluses have been improving off the back of global and domestic economic recovery.
South Africa's current account balance widened to 5% of GDP for the first quarter of the year, up from the 3.7% recorded previously, data from the South African Reserve Bank (SARB) shows .
The current account balance is considered an indicator of an economy's health. It is the difference between credits - incomes and receipts - and debits - imports and payments.
In monetary terms the surplus is R267 billion, the second largest recorded. The largest monetary surplus recorded was in the third quarter, at R297.5 billion.
"The largest surplus in monetary terms was recorded in the third quarter of 2020, equal to 5.9% of GDP," the SARB said. At the time trade surpluses rebounded as Covid-19 related lockdown restrictions started easing globally, Fin24 previously reported.
The SARB said that the first quarter current account surplus is largely attributed to a continuation of a good export performance, on the back of high commodity prices, coupled with a recovery in global economic recovery.
During the quarter there were improvements in both imports and exports, and the trade surplus improved slightly to R430 billion, up 1% from R425 billion reported previously.
"The larger trade surplus resulted from the value of merchandise exports increasing to a new all-time high while the value of imports rose to a lesser extent. The higher value of merchandise exports reflected an increase in prices while merchandise imports resulted from higher volumes," the report read.
The country's terms of trade also improved for the seventh consecutive quarter, indicating the longest period of consecutive quarterly increases on record. "The improvement resulted from a further rise in the rand price of exports of goods and services alongside a lower price of imports," the Reserve Bank said.
Investec economist Lara Hodes told Fin24 earlier this week that robust commodity prices are expected to continue to support exports. "We are still anticipating a trade surplus, albeit not as pronounced, in the near-term," Hodes said.
The larger current account surplus is also attributed to the "significantly reduced deficit" in the income account, the SARB said. The deficit for services, income and current transfer account, narrowed to 3.1% of GDP compared to 4.2% recorded in the fourth quarter.