Although declining slightly compared to the third quarter of 2020, South Africa maintained a high trade surplus in the fourth quarter of 2020, at R103 billion. Year-on-year, this marks a more than 300% increase in the trade surplus compared to the fourth quarter of 2019. The surplus is the result of low imports and high exports (Graph 1). This has been the case over the last three quarters in particular as South Africa and its trade partners continue to respond to the COVID-19 pandemic that began in January 2020.
South Africa had a trade surplus of R109 billion in the third quarter of 2020, up from R6 billion in the third quarter of 2019. In constant 2020 Rand, this is the highest trade surplus South Africa has had in the past decade. The high surplus appears to be the result of low imports due to lower crude oil imports, as well as the increased spread of COVID-19 pandemic among major trade partners like Germany and the United State, while exports surpassed pre-COVID-19 levels due to high exports to China and the US. In the year to the third quarter of 2020, exports grew by 10% to R388 billion, from R353 billion in the third quarter of 2019. However, between the third quarter of 2010 and the third quarter of 2020, exports grew by 49%. In contrast, imports declined by 20% to R278 billion in the year to the third quarter of 2020, and grew just 8% between the third quarter of 2010 and the third quarter of 2020.
South Africa had a trade surplus of R30 billion in the second quarter of 2020, up from R4 billion in the second quarter of 2019. Generally, South African trade performs better in the second quarter of the year, compared to the first quarter. With the exception of 2012 to 2014, there has been a trade surplus every year in the second quarter for the past decade.
South Africa had a trade surplus of R35 billion in the first quarter of 2020, up from a trade deficit of R4 billion in the first quarter of 2019. With the exception of the first quarter of 2017, South Africa has had a trade deficit in the first quarter of each year as far back as 2010. In 2020 constant Rand terms, imports declined by 5% between the first quarter of 2019 and the first quarter of 2020, but grew by 30% from the first quarter of 2010. In contrast, exports grew by 8% in the year to the first quarter of 2020, and grew by 55% between 2010 and 2020.
This fourth quarter report of the Import Tracker is in two sections. The first section focuses on import trends for the fourth quarter of 2019, similar to previous reports. The second section of the report provides a brief review of some of the major trends for 2019. The review focuses on the major imports in both Rand and quantity terms.
Main Bulletin: The Real Economy Bulletin - Third Quarter 2019
In this edition
GDP growth: For the second time this year, the GDP contracted in the third quarter of 2019. In the past two years, the economy has reportedly shrunk in four quarters, underscoring the effects of the slowdown. Reported GDP growth has also become unusually erratic, with the economy growing reasonably strongly when it was not actually shrinking. Read more.
Employment: Total employment remained virtually unchanged over the past year. Construction lost 160 000 jobs, however, which was offset by growth in other industries. Quarterly figures are hard to interpret because they are not seasonally adjusted. Read more.
International trade: In constant rand, South African exports have increased slightly since 2014, while imports are lower than they were five years ago despite some increases in the past two years. Read more.
Investment and profitability: Private investment recovered over the year to September 2019, with a particularly sharp increase in the second to third quarter 2019. This growth reversed a decline over the previous three years. In contrast, both the government and state-owned corporations (SOCs) saw a fall in investment. Read more.
Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects on a quarterly basis, using published information. In the third quarter of 2019, 16 projects were added to the FDI Tracker. Investment values were available for 11 of these projects, and the pledged value came to R13 billion. Read more.
Briefing note: Responding to the economic slowdown: The GDP has for the second time this year slipped into negative territory. Since 2015 the economy has struggled to break free from sluggish performance. An appropriate policy response, however, requires an accurate diagnostic. In particular, we need to understand why growth has slowed steadily since before 2011, not only in South Africa but globally. Read the briefing note online: Responding to the economic slowdown.
Briefing note: SAA by the numbers: In the first week of December 2019, South African Airways (SAA) was put into business rescue.This briefing note provides an overview of its financial position, which left government with no other realistic option. Read the briefing note online: SAA by the numbers.
The trade balance grew in the second quarter of 2019. As at the end of the quarter, the trade surplus was R3 billion. Generally, the second quarter tends to reflect a trade surplus. With the exception of the second quarters between 2012 and 2014, there has been a second quarter trade surplus since 2010, the highest being R35 billion in the second quarter of 2016. Nevertheless, the year-on-year trade surplus declined by 85%, from R18 billion in the second quarter of 2018 to R3 billion. Further, both imports and exports grew year-on-year, with imports growing by 8%, compared to 2.8% for exports. Crude oil, diesel and automotive components remain the biggest drivers of imports.
The trade balance declined in the first quarter of 2019. At the end of the quarter, the deficit was R0.3 billion. With the exception of the first quarter of 2017, South Africa has seen a trade deficit in the first quarter for the 10 years between 2010 and 2019.
Main Bulletin: The Real Economy Bulletin - First Quarter 2019
In this edition
GDP growth: The GDP declined in the first quarter of 2019, while the economy lost jobs. The downturn continues the trend of volatile growth rates that began five years ago. Previous quarterly downturns in this period, however, were driven by agriculture; in contrast, the past quarter saw a broad-based decline. The briefing note on the economic slowdown explores factors behind these trends. Read more.
Employment: Employment in the real economy fell by 160 000 jobs in the year to the first quarter of 2019. It is now at the same level it was in 2015. Manufacturing and construction accounted for the bulk of the net loss in jobs. In the rest of the economy, community and social services lost more than 200 000 jobs while other sectors gained employment. Overall, employment as a whole lost jobs for only the second time since 2010. Read more.
International trade: In constant rand terms, South African exports have barely grown since 2013. In US dollars, they climbed from 2016 to mid-2018, but fell more than 10% in the six months to March 2019. Nonetheless, an even faster decline in imports – due in part to slow growth and in part to fairly low petroleum prices – meant that the balance of payments remained positive, although a deficit emerged in the first quarter of 2019. Read more.
Investment and profitability: The 2% fall in investment from the year to the first quarter 2018 to the year to the first quarter 2019 was a central factor behind the economic downturn. The sharpest decline emerged for public investment, although both state-owned enterprises and government departments reported a recovery in the first quarter of 2019 alone. Private investment, in contrast, grew slightly year on year, but contracted sharply from the fourth quarter of 2018 to the first quarter of 2019. Read more.
Foreign direct investment projects: The TIPS FDI Tracker tracks foreign direct investment projects, analysing new and updated projects quarterly. Based on media monitoring, it added 14 new projects in the past quarter. Ten of these were in manufacturing, and five were greenfield projects. Six projects previously captured in the Tracker have been updated, with two reaching completion. Read more.
Briefing note: The economic slowdown: The first quarter of 2019 saw a convergence of poor economic data. The GDP fell by 0.8%; investment, by 1.1%; and exports by 2%. Employment dropped by 1.4%, or 240 000 jobs. Seasonal job losses are not uncommon in the first quarter, but from 2010 to 2018 they averaged just 0.1%, so 2019 saw a significantly larger fall. Read the briefing note online: The economic slowdown.
Briefing note: African Continental Free Trade Area (AfCFTA) - Supporting inclusive growth and transformation: The African Continental Free Trade Area (AfCFTA) requires 22 countries to ratify its adoption and submit proof/deposit the instruments of ratification with the African Union (AU) for it to come into effect. On 29 April that happened, and on 30 May 2019 the free trade agreement came into effect. Read the briefing note online: African Continental Free Trade Area (AfCFTA): Supporting inclusive growth and transformation.
The trade balance declined in the fourth quarter of 2018, however, although it fell there was still a trade surplus. During the same period, imports grew by 7,8% while exports saw a minimal growth of 1,2%.