South Africa records its first annual current account deficit since 2019
Data released by the South African Reserve Bank indicates that South Africa’s current account switched from a (revised) surplus of R3.1 billion in the third quarter to a deficit of R174 billion in the fourth quarter of 2022. As a ratio of GDP, the current account thus switched to a deficit of 2.6% in the fourth quarter of 2022. On an annual basis, the current account balance went from a surplus of R228 billion in 2021, which was also the largest annual surplus on record, to a deficit of R31.8 billion in 2022. In effect, the current account changed from a surplus of 3.7% in 2021 to a deficit of 0.5% in 2022 as a ratio of GDP.
The switch in the current account to a deficit in the fourth quarter of 2022 came about as the trade surplus of R249 billion in the third quarter narrowed significantly to R12.2 billion. The value of merchandise imports increased while that of merchandise exports declined, with the increased value of imports of goods and services ascribed to higher prices, while the lower value of exports of goods and services was due to a decrease in both volumes and prices.
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