South Africa: Fourth quarter current account deficit narrows to 6.5% of GDP from 6.8% in Q3

South Africa: Fourth quarter current account deficit narrows to 6.5% of GDP from 6.8% in Q3

South Africa’s current account deficit narrowed slightly in the fourth quarter of 2012, falling to R212.6bn from R215bn in Q3. Coupled with the q/q increase of R91.9bn in fourth quarter GDP, the result was that the current account deficit as a percentage of GDP narrowed from 6.8% in Q3 (revised up from 6.4%) to 6.5%. In addition to the trade deficit narrowing from R87.3bn in the third quarter to R86bn, net service, income and current transfer payments also declined in the final quarter, declining from R127.7bn in Q3 to R126.6bn. The net result of these declines was a R2.4bn reduction in the current account deficit in the fourth quarter. Expressed as a percentage of GDP, the current account deficit averaged 6.3% in 2012, a considerable deterioration from 3.4% in 2011.

South Africa: Retail sales growth healthy but slowing to 4.3% y/y in Sept from 6.7% in Aug

South Africa: Retail sales growth healthy but slowing to 4.3% y/y in Sept from 6.7% in Aug

Retail sales growth slowed in Sept to 4.3% y/y, after recording annual growth rates of 6.7% and 2.9% in Aug and July respectively. The growth slowdown may be partly attributed to the transport strikes of Sept, which likely disrupted retail sales during the month. In addition, retail sales may have been constrained by a pickup in retail inflation, coupled with slower growth in household disposable income (see charts). Retail inflation has recently risen from 3.9% y/y in August to 4.5% in September, while growth in household disposable income appears to be trending downward, equalling 3.7% y/y in Q2 2012 versus growth of 5.6% for the same period in 2011.