South Africa’s external position remains relatively sustainable

SOUTH AFRICA - Report 17 Jun 2025 by Iraj Abedian

Data released by the South African Reserve Bank shows that, during the first quarter of 2025, the deficit of South Africa’s current account narrowed slightly, to R35.6 billion, down from R39.3 billion in the fourth quarter of 2024. As a percentage of GDP, the deficit held steady at 0.5% over both quarters, indicating a relatively stable external balance despite modest fluctuations in trade and income flows.

However, the country’s trade surplus edged lower, from R226.4 billion in the fourth quarter of 2024 to R221.2 billion in the first quarter of 2025, as merchandise imports rose at a faster pace than merchandise exports. The uptick in the value of both imports and exports of goods and services during the quarter was driven by a combination of higher volumes and increased prices. Therefore, underpinning the reduction in the current account deficit was the narrowing of the shortfall on the services, income and current transfer account, which fell from R265.7 billion in the fourth quarter of 2024 to R256.8 billion in the first quarter of 2025.

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