May heralds trade surplus but export picture remains bleak

South Africa’s export figures rebounded in May by R1.75 billion, the Reserve Bank has announced.

In its latest trade assessment the central bank said May had recorded exports of R112.07 billion compared to imports of R110.33 billion.

The trade surplus has come as welcome news after April’s trade deficit of R3.53 billion.

Unfortunately May’s surplus is significantly lower than that yielded year-on-year as 2018’s surplus for the same month was R4.76 billion.

Investec economist Lara Hodes has meanwhile expressed her reservations about exports for the rest of the year, despite the relative strength of May’s outflows.

She said GDP contraction in the first quarter and severe power outages earlier this year had hurt both investor and consumer confidence, with the possibility that an overall depressed trade appetite would be reflected in forthcoming import-export figures.

It is furthermore felt that the World Bank’s downward adjustment of economic prospects for the rest of the year, from 2.9% to 2.6%, coupled with the ongoing trade tension between China and the US, will also lead to muted mercantile activity.

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