South Africa’s current account turns favorable as terms of trade improve in Q1 2024

SOUTH AFRICA - Report 07 Jun 2024 by Iraj Abedian

The latest current account data released by the South African Reserve Bank shows that, during the first quarter of 2024, while South Africa’s current account continued its trend of consecutive deficits since Q2 2022, the deficit was noticeably smaller than that of the preceding quarter. The deficit narrowed from R162.9 billion in the fourth quarter of 2023 to R84.6 billion in Q1 2024. Relative to GDP, the current account deficit narrowed from 2.3% in the fourth quarter of 2023 to 1.2% during the first quarter of 2024.

Underpinning the reduction in the current account deficit was the increase in the country’s trade surplus from R90.9 billion in the final quarter of 2023 to R183.4 billion in the first quarter of 2024. This was on account of the slight increase in the value of merchandise exports, together with a decline in the value of merchandise imports. The higher value of exports of goods and services was attributed to higher prices, while the lower value of imported goods and services was due to lower volumes.

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