S. Africa's exports drop despite weaker rand

South African export volumes declined in the fourth quarter of 2015 despite a weaker rand, the first contraction since the second quarter of 2014, data released on Tuesday showed.

This reflected the fragile world economy and the concomitant slower growth in world trade volumes, the South African Reserve Bank (SARB) said in its Quarterly Bulletin.

Though the depreciation in the exchange value of the rand boosted the export earnings of domestic producers, these benefits were more than fully offset by a further fall in international commodity prices, the bank said.

By contrast, import volumes increased further, reflecting firm growth in real domestic expenditure that flowed through to rising imports of capital and consumption goods, it said.

Meanwhile, the bank said the country's trade deficit resultantly widened in the final quarter of 2015, despite a slight improvement in South Africa's terms of trade.

Together with a somewhat larger shortfall on the services, income and current transfer account, the deficit on the current account of the balance of payments widened to 5.1 percent of gross domestic product (GDP) in the fourth quarter of 2015.

The gap, the broadest measure of trade in goods and services, increased from a revised 4.3 percent in the previous three months, the bank added, according to the bank.

The deficit for 2015 narrowed to 4.4 percent of GDP from 5.4 percent in the previous year. The government is forecasting a shortfall of four percent this year. Enditem