Nedbank: Trade data

01 Nov.

Nedbank Economic Commentary: Trade data.

Strong export growth pushes the trade account into surplus.

• A strong rise in exports pushed the trade account to a R2,5 billion surplus in September after two months of large deficits.
• Exports were up by 11,1% m-o-m and 27,5% y-o-y, while imports increased by 0,8% m-o-m and 31,7% y-o-y. During the third quarter exports increased by 9,9% q-o-q (17,5% y-o-y), while imports were up by 13,9% q-o-q (21,5% y-o-y).
• The strong growth in exports is unlikely to be maintained in the coming months as the global economy continues to show signs of strain. Domestically, the rand remains relatively strong despite its recent weakness, while the decline in global commodity prices will limit growth in export values. Imports, on the other hand, are likely to benefit from some improvement in fixed investment spending.
• The data have little implication for monetary policy in the short term given their volatile nature and the MPC’s focus on inflation and growth. Although the chances of a rate cut have increased, especially if the world and local economies were to weaken, we still expect interest rates to remain on hold until the third quarter of 2012.

Comment

A strong rise in exports pushed the trade account into a surplus in September following two consecutive months of large deficits.

The key categories of exports recorded strong increases in export values during the month, with ‘precious or semi-precious stones’ (27,7% m-o-m), ‘mineral products’ (13,6% m-o-m) and ‘vehicles and equipment’ (13,9 m-o-m) all rising strongly.

For the quarter, exports rose by 9,9% q-o-q and 17,5% y-o-y as ‘precious or semi-precious stones’, ‘mineral products’ and ‘vehicles and equipment’ increased by 10,7%, 12,6% and 13,3% over the quarter, respectively.

Imports increased mainly on the back of higher values of ‘electrical equipment’ (7,0% m-o-m) and ‘chemical products’ (5,0% m-o-m), but imports of ‘vehicles and equipment’ fell by 3,2% m-o-m. Imports increased by 13,9% q-o-q and 21,5% y-o-y during the quarter. ‘Electrical equipment’ (14,7% q-o-q), ‘vehicles and equipment’ (25,4%) and ‘chemical products’ (23,7%) were the main drivers of imports during the quarter. Imports of mineral products fell by 0,9% during the quarter. …

See the full Commentary