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The SA Daily 29 June 2018

Trade surplus likely steady in May

  • Today will see several local data releases, the most notable being the May trade balance. We expect a steady R3bn surplus, after the R1.1bn surplus in April. This is below Bloomberg’s expectations of a R5.8bn surplus.
  • Our below-consensus call is because May is a seasonally weak month. However, this weakness will likely have been counteracted by the retreat in the surprisingly high oil import volumes of earlier this year.
  • After the disappointingly wide current account deficit (CAD) in Q1:18, at 4.8%, from 2.9% in Q4:17, we now expect a CAD of 3.5% (3.3% previously) for 2018. The widening in Q1:18 was largely due to a sharp decline in SA’s terms of trade. Further disappointments in the trade balance could see the CAD widen further, thereby putting pressure on the rand (see Market malaise continues of 22 June, by Elna Moolman).

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