Sign in
Research link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services
Economics link-chevron Created with Sketch.
FX Report
The Loop
Inside China
Insights & Strategy
Equities link-chevron Created with Sketch.
Corporate Commissioned Research
Analysts
Analysts
Help and Support
Help and Support
Corporate and Investment Bank
Standard Bank Group
The SA Daily 31 July 2020

Another trade surplus expected in June

Shireen Darmalingam

  • World trade fell sharply in H1:20 on the back of the COVID-19 pandemic as trade restrictions remained widespread globally. Governments responded rapidly to help temper the contraction in trade. As such, while trade volumes are expected to register sharp declines for the year as a whole, it is unlikely to reach the worst-case scenarios previously anticipated.
  • SARS releases the June trade balance data later today. Bloomberg consensus expectations are for the trade balance to have remained in surplus in June, albeit narrowing to R10bn from R15.9bn in May. Recall, in May, the trade balance was supported by an increase in exports, which rose by 96.1% m/m to R101.8bn in May while imports fell by 2.2% m/m to R85.9bn. The cumulative YTD trade balance stands at a surplus of R14.9bn compared to a deficit of R6.3bn in the comparable period last year.
  • The Q1:20 current account balance also overshot expectations and swung into a surplus of 1.3% of GDP from a deficit of 1.3% of GDP in Q4:19. This marked the first current account surplus in 17 years. The improvement came on the back of the large trade surplus in Q1:20 which more than doubled prior to the COVID-19 lockdown restrictions which were implemented at the end of Q1:20. The trade surplus widened to R208bn in Q1:20 from R102.5bn in Q4:19.
  • We expect weaker prints than in Q1:20 along the way as the effects of the COVID-19 pandemic on imports and exports were still limited in the first quarter of 2020 as the lockdown restrictions were only implemented towards the end of March. However, we maintain our relatively bullish expectations for the current account, although the quarterly trajectory may display its usual volatility.

Read PDF