JOHANNESBURG, July 30 (Reuters) - South Africa recorded a trade surplus of 5.6 billion rand ($762.3 million) in June compared with a 302 million rand shortfall in May, the South African Revenue Service said on Friday.
SARS said in a statement exports rose by 17.8 percent to 55.6 billion rand compared with the previous month, outpacing a 5.2 percent increase to 49.9 billion rand in imports.
Economists polled by Reuters had predicted a 2 billion rand deficit in the trade account, but the number is generally volatile and difficult to forecast.
ANALYST COMMENT
KEVIN LINGS, ECONOMIST, STANLIB
'Although exports improved noticeably in June 2010, they are likely to struggle to accelerate significantly given the still strong rand and fairly modest world economic recovery.
'Fortunately, from a balance of payments perspective, import demand is expected to also remain fairly modest given the still weak domestic economy.
'This implies that although the trade balance is likely to weaken during H2 2010/H1 2011, with South Africa running a more persistent trade deficit, this deterioration should be fairly modest and manageable from a capital inflow perspective.'
ISAAC MATSHEGO, ECONOMIST, NEDBANK
'The continued rise in exports is encouraging, but it remains to be seen whether recent trends can be maintained against the backdrop of a more uncertain global economic outlook.
'The current account deficit widened to a larger-than-expected 4.6 percent in the first quarter and we still expect it to widen marginally in 2010 after narrowing significantly in 2009.
'The data will have little impact on markets and does not alter our interest rate view.'
JEFFREY SCHULTZ, MACRO STRATEGIST, ABSA CAPITAL
'It's a lot better than consensus but as noted, the improvement was driven largely by a significant jump in trade due because of postponements in a lot of goods orders due to a strike in May.
'That is what bolstered us back into surplus territory. There was some positive growth in seasonal exports as well. It's difficult to read too much into this because it's been distorted by the strike.
'It's going to be interesting to see what happens in Europe. Exports to the European Union are likely to take a bit of a knock in the coming months. But we've got to remember Europe is not our only trading partner. Yes, it's significant but the likes of the U.S. and China are growing and those are important countries to look at ... Europe is one thing to look at but it's certainly not the whole picture.'
RAZIA KHAN, HEAD OF RESEARCH, AFRICA, STANDARD CHARTERED
'An unequivocally rand positive figure. While the rand will benefit from this news, it is interesting that it still speaks of considerable weakness in the South African economy, unless of course, everyone just took some time off to watch the World Cup.
'While the recovery in the rest of the world helped, South Africa's own recovery looks a little less certain. Year-to-date, the cumulative deficit is a lot more benign relative even to last year, but this is mainly because of the pick-up in growth in South Africa's export markets.
'With everyone still giving some thought to the outlook for the external economy, South Africa will not be able to take huge comfort in a single month's trade figures. The rand will benefit in the short term, but it's what the data signals about the bigger picture that may be the real worry.'
GEORGE GLYNOS, MANAGING DIRECTOR, ETM
'It looks like a very strong number. It appears that ... the transport strike may have something to do with this. It is very difficult to ascertain that at this stage of the game, but it's a big trade surplus number.
'It gives perspective as to why the rand has been resilient and strong as it has been. One waits to see if this is sustained through the July data, given that we did not have a transport strike at that time.'
MARKET REACTION
The rand initially firmed to 7.35 against the dollar after release of the data at 1200 GMT, from 7.34 beforehand, but was last at 7.3450. The yield on the benchmark 2015 government bond was down to 7.585 percent from 7.65 percent before.
BACKGROUND
- Pressure on the trade account has previously been increasing as the local economy recovers after last year's recession, with importers of capital goods rising.
- Latest data shows the current account deficit widened to 4.6 percent of GDP in the first quarter of 2010 compared with a 2.9 percent gap in the fourth quarter of 2009.
(Reporting by Johannesburg Newsroom; Editing by Ron Askew) (For more Reuters Africa cover visit: http://af.reuters.com/ -- To comment on this story email:SouthAfrica.Newsroom@reuters.com) Keywords: SAFRICA TRADE/
(xola.potelwa@thomsonreuters.com; +27 11 775 3530; Reuters Messaging:xola.potelwa.reuters.com@reuters.net)
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