S. Africa’s current account deficit widens in Q4 ’23

South Africa’s current account deficit surged to R165.5 billion in the fourth quarter (Q4) 2023 from R34.4 billion in the third quarter (Q3), reaching 2.3 per cent of GDP compared to 0.5 per cent in the previous quarter, according to the South African Reserve Bank’s data on Thursday.

Annually, the deficit rose to R112.5 billion (1.6 per cent of GDP) in 2023 from R30.0 billion  (0.5 per cent of GDP) in 2022.

The trade surplus decreased from R181.1 billion in Q3 2023 to R88.1 billion in Q4 due to a rise in imports surpassing exports. For 2023, the trade surplus shrank to R103.5 billion(1.5 per cent of GDP) from R224.2 billion (3.4 per cent of GDP) in 2022.

The shortfall in services, income, and transfers expanded from R215.4 billion in Q3 2023 to R253.7 billion in Q4, mainly due to a larger deficit in primary income. However, deficits in services and secondary income decreased. On an annual basis, the shortfall narrowed to R215.9 billion  (3.1 per cent of GDP) from R254.3 billion (3.8 per cent of GDP) in 2022.

South Africa’s terms of trade worsened in Q4 2023, driven by a higher rand price for imports compared to exports.

Annually, terms of trade also deteriorated due to increased import prices while export prices remained relatively stable.