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 06 December 2018

Q3 CAD due out

  • The Q3 current account deficit (CAD) is due out today; we expect some deficit compression to 3.2% of GDP, from 3.3% in Q2.
  • For Q3:18, the trade balance posted a deficit due to high oil prices as well as disappointing commodity prices, as reflected in the mining sector’s poor Q3 performance. However, per our report GDP and CAD set to improve of 08 November, by Elna Moolman, there may be relief in the other components of the CAD for Q3:18 —but the forecast risk is still high.
  • Should the Q3 deficit compress more than expected, that would support the rand and local bond markets. However, a disappointment wouldn’t, given the fragile global setting. 
  • We expect subdued domestic demand and the lagged impact of a weaker rand to  support the trade balance, key to further deficit compression; lower oil may also support the SA terms of trade, which would ease the trade balance. However, the medium-term SA mining sector outlook is bleak because commodity prices remain constrained.
  • Renewed global growth concerns as well as the US-China trade war pose key risks to the SA trade balance and any CAD compression.

Read PDF