SA’s current account deficit at 7-year low

2010, while expenditure slowed, partly due to a moderation in household spending, the Reserve Bank said yesterday.
Monde Mnyande, Reserve bank Chief Economist and adviser to Governor Gill Marcus, said the recovery in Africa’s biggest economy was continuing and Japan’s nuclear disaster would have limited impact.
The Reserve Bank said the current account deficit narrowed to 0,6 percent of gross domestic product, from a slightly revised 3,1 percent in the third quarter. Analysts polled by Reuters expected a shortfall of 2,55 percent to GDP.
“The smaller current account deficit in the second half of 2010 reflects the much-reduced savings investment gap, indicative of the subdued pace of fixed capital formation and the resulting lower levels of imports, particularly of capital and intermediate goods,” the central bank said.
South Africa’s rand was little-changed after the data but yields on the benchmark 2015 bond narrowed to 7,855 percent from 7,895. Imports fell by 2,2 percent in volume terms and 3.4 percent in value. The contraction in import volumes in the final quarter of 2010 could largely be attributed to a decline in intermediate imports – more in particular crude oil imports – alongside a decline in the physical quantity of manufactured goods imported,” Monde Mnyonde said. – Reuters.