Flash Note 2Q21 Current Account

  • Market Overview

The current account surplus widened to a record R343 billion

The current account, seasonally adjusted and annualised, recorded a record surplus of R343 billion in 2Q21, up from R261 billion in 1Q21. As a percent of GDP , the current account now stands at 5.6%, from 4.3% previously (revised down from 5.0% with the revision to GDP).

Driving the current account surplus is the trade balance on goods, which posted a surplus of R614 billion in 2Q21, up from R451 billion in 1Q21, and continues to be a price story with terms of trade in 1H21 being 20.1% above 1H19 and 9.5% above 1H20. Export prices, which also reached a new record high in the second quarter, increased by 7.3% q/q while volumes grew by 4.0% q/q. Import values increased by less, posting 2.8% q/q, while volumes increased by 0.4% q/q. As a percent of GDP, the trade balance on goods is currently 10.0%, up from 7.5% previously.

The services, income and current transfer account (SIT) recorded a deficit of R271 billion, from a R190 billion deficit previously, which translates into -4.4% of GDP (from -3.2% in the first quarter). This is explained by a large shortfall in the primary income of R169 billion (-R63 billion previously), services recorded a lower shortfall of R66 billion (from-R72 billion), and current transfers recorded -R36 billion (from -R55 billion).

We expect the current account to average 1.9% as a percent of GDP in 2021, with upside risk from today’s outcome, but we are concerned about how the shortfall in primary income will evolve.

Current account balance
Subcomponents
Terms of trade

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100
  • Maroga Noughty @Maroga Noughty
    That too much drawdown
    Like 0