SA's deficit narrows

Tuesday, March 22, 2011

Pretoria - South Africa's current account deficit in the fourth quarter of 2010 narrowed to 0.6 percent of the Gross Domestic Product (GDP) since 2003, said the Reserve Bank on Tuesday.

"The balance on current account registered a significantly smaller deficit of R17.0 billion (or 0.6 percent) of GDP in the fourth quarter of 2010 - a similar magnitude was last recorded in the fourth quarter of 2003," said the bank in its Quarterly Bulletin on Tuesday. 

The March bulletin comes as the Reserve Bank's Monetary Policy Committee meets this week to discuss rates.

The smaller deficit in the second half of 2010 also showed much reduced savings investment gap in the economy. This, said the bank, was indicative of the subdued pace of fixed capital formation and lower levels of imports.

Mining was boosted in the last quarter of 2010 due to the sustained economic recovery in emerging market economies and in advanced economies' higher demand for South African commodities. There was raised demand for South African produced coal as well as iron ore, while exports of vehicles, optical and professional equipment also rose.

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