South Africa‘s current account deficit narrowed to 3.7% of gross domestic product (GDP) in the third quarter from 4.1% in the second three months of the year, central bank data showed on Thursday.
The deficit, which was wider than the 3.1% forecast by economists surveyed by Reuters, is unlikely to stay narrower as the country faces weak economic growth and a tougher export market as the Sino-U.S. trade war drags on.
The trade balance swung to a surplus of R41.1 billion in the third quarter from a deficit of 31.8 billion rand in the previous three months.
GDP fell by 0.6% in the third quarter according to data on Tuesday, a second quarterly contraction in 2019, raising the likelihood the country could lose it last investment grade rating by mid-2020.
The National Treasury said in late October that it expected the current account deficit – a gauge of the country’s imports and exports and payments to foreign investors – to average 3.5% of GDP in 2019/20 and the two years after that.
Mining, manufacturing and agriculture, which account for about a quarter of GDP and a large chunk of exports, have struggled this year in the face of nationwide power cuts by state power firm Eskom and the return of a severe drought in the region.