South African July balance of trade to be released
South Africa will today release its July balance of trade, which is likely to show a trade surplus of $3.8 billion, up from $2.7 billion in June.
South Africa recorded a record-high trade surplus in June due to weak import demand, highlighting the woes of a struggling economy. Total exports in June reached $6.8 billion—a 6.5% year-on-year increase—while imports sat at $4.1 billion, a decrease of 32.8%. The economy contracted by a record 32.6% in the second quarter, although growth is expected to rebound marginally in the third quarter.
Expect South Africa’s trade surplus to shrink as the economy recovers in the coming months. With the lifting of lockdown restrictions in mid-August, the recovery of manufacturing activity—reflected in a rising PMI and a strengthening currency—and import demand should recover as growth rebounds. Strong prices for precious metals will continue to support South African exports. However, recent energy shortages may continue to constrain the national recovery timeline.
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