South Africa posted a current-account deficit for the first time in three years in 2022 as imports increased and power shortages and logistics network constraints curbed exports, heightening the nation\u2019s vulnerability to external shocks.<\/p>\n
The balance on the current account, the broadest measure of trade in goods and services, swung to a deficit of 0.5% of gross domestic product, or R31.8 billion, from a surplus of 3.7% in 2021, the South African Reserve Bank said in a report published Thursday.<\/p>\n
It\u2019s the first annual shortfall since 2019 and comes after coronavirus restrictions and global supply-chain disruptions suppressed imports.<\/p>\n
The current-account gap and the budget shortfall, which the Treasury sees narrowing to 4% of GDP in the fiscal year through March 2024, make South Africa vulnerable to external shocks amid deteriorating global economic prospects.<\/p>\n
In January, the World Bank cut its growth forecasts for most countries and regions and warned that new adverse shocks could tip the global economy into a recession.<\/p>\n
The current-account balance in the fourth quarter was an annualized shortfall of 2.6% of GDP, or R174 billion, compared with an upwardly revised surplus of R3.1 billion in the previous three months.<\/p>\n
The median of nine economists\u2019 estimates in a Bloomberg survey was for a negative balance of 2.5% of GDP.<\/p>\n
South Africa\u2019s economy contracted by 1.3% in the fourth quarter, with statistics agency data showing intense rolling blackouts and declines in mining activity and exports, curtailing output growth.<\/p>\n
Eskom Holdings SOC Ltd. subjected the country to power cuts, known locally as load shedding, on all but three days during the quarter, while disruptions at fellow state-owned company Transnet SOC Ltd.\u2019s aging rail network and ports affected shipments of key commodities.<\/p>\n
The impact of rolling blackouts and logistics infrastructure shortfalls were partially countered by the first coronavirus-restriction free summer holiday season.<\/p>\n
The deficit on the services account, under which income from tourism falls, narrowed to R85 billion in the fourth quarter, from 108 billion in the previous three-month period. December is traditionally the most popular holiday month in South Africa.<\/p>\n
The central bank\u2019s quarterly projection model in January shows it expects a current-account gap of 1.7% of GDP in 2023.<\/p>\n
The current-account balance is expected to deteriorate over the short- to medium-term due to continued electricity-supply constraints, increased investments in alternative energy solutions that will drive up imports, and a projected decline in export volumes, Governor Lesetja Kganyago said in a speech posted on the Reserve Bank\u2019s website Tuesday.<\/p>\n