Nedbank: Trade data

30 Dec.

Nedbank Economic Commentary: Trade data November 2011.

The trade deficit remained unexpectedly high in November.

• November’s trade deficit remained high at R8,04 billion from October’s exceptionally large R9,58 billion shortfall.
• The November deficit was expected to narrow for seasonal reasons as imports normally start to ease in the month following earlier festive season pre-buying.
• Imports rose by 8,1 % in the month and were up over 47 % on the previous November. The main contributors to the monthly increase were sharp rises in imports of mineral products (mainly oil, up 21 %) and in machinery and electrical appliances (up 12 %).
• Exports rose by 11,9 % in the month but were less than 14 % higher than the same period a year ago. The main contributors to the improvement from October were in the categories of chemicals (up 59 %), precious metals and stones (up 26 %) and base metals (up 17 %).
• In the year-to-November, the cumulative deficit widened to R21,3billion from R5,3 billion during the same period in 2010.
• The November figures are disappointing but trade figures are notoriously volatile and should not be overinterpreted. The immediate outlook will see some improvement, with December normally showing a large surplus for seasonal reasons. However, the current account deficit for 2011 is likely to be over 4 % of gdp and we expect the trade deficit to widen in 2012 as imports remain relatively high, supported by infrastructural spending, but exports are hurt by a slowdown in global growth.
• The trade statistics are unlikely to have much in the way of policy implications. We still expect interest rates to remain on hold until late 2012 as growth falters but inflation remains near the top of the target range. …

See the full Commentary