29 Apr.
The trade account turned to a R900million surplus in March following two months of deficits. The consensus was for a deficit of R900million; exports increased by 15,3 %m-o-m, while imports rose by 12,7 % m-o-m.
For the first quarter, a R4306million deficit was recorded following a surplus of R15519million in the previous quarter.
Exports were up by 22,9 % while imports increased by 18,1 % compared with the first quarter of 2010.
Export growth is expected to be supported by demand for commodities and firmer global growth, particularly in emerging markets. Imports will benefit from firm consumer demand and government infrastructure investment activity. However, this will be partly offset by the slow recovery in private sector investment, which accounts for over 70 % of total fixed capital formation.
The monthly trade figures are highly volatile and have little influence on monetary policy in the short term. The MPC is likely to continue to watch developments in both the inflation outlook and the economic recovery. Today’s credit extension numbers suggest that the slow recovery in credit could be a key reason for the Reserve Bank to delay tightening monetary policy, with an early hike in interest rates viewed as premature despite rising cost-push inflationary pressures related to higher food and energy prices. We are still of the view that the first increase in rates will come only in early 2012, although the risks of an earlier increase have risen.
Down load Trade data Mar 2011.pdf
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