South Africa trade deficit narrows

June 30, 2014
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South Africa trade deficit narrows/AFP
South Africa trade deficit narrows/AFP

, JOHANNESBURG, June 30- South Africa’s trade deficit narrowed to 6.57 billion rand ($619 million, 453 million euros) in May, but fears of a hit from another protracted mining strike loomed.

Imports fell by 5.9 percent during the month, helping to slash the deficit from a revised level of 12 billion rand in April.

Economists had predicted that a five month strike in South Africa’s mining industry would bite hard in May, widening the gap between the value of imports and exports.

The data was seen as giving some temporary relief to the beleaguered South African rand, which has slumped this year as the longest mining strike in the country’s history has cut economic growth.

But any rally may be short lived.

South Africa’s largest union has said that more than 200,000 engineering and metal workers will go on strike on Tuesday over pay and conditions, another strike that could hit exports hard.

“The outlook for exports has improved as platinum mines return to full production,” economists at Nedbank told clients in a research note.

“However, a mooted labour strike in the metals sector is likely to inhibit a strong recovery.”

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