South Africa reported its largest current-account surplus on record last year as import demand was suppressed by the economy recovering from the impact of the coronavirus and the value of gold exports rose to the highest since at least 1960.
The balance on the current account, the broadest measure of trade in goods and services, widened to a surplus of 3.7% of gross domestic product (GDP), or R227-billion, from a revised 2% in 2020, the South African Reserve Bank said in a report. The ratio of the surplus to GDP is the highest since 1987.
The current-account surplus shrank more than expected in the fourth quarter to an annualised surplus of 1.9% of GDP, or R120 billion-rand, from a revised 3.5% in the previous quarter. That’s less than the 2.5% median estimate of 12 economists in a Bloomberg survey.
The quarterly surplus was the sixth in succession, the longest streak since 2001.
The record annual surplus may boost the rand, which has strengthened 5.9% against the dollar this year. That’s as investors look for less risky emerging-market assets after the war erupted in Ukraine and sanctions were imposed on Russia.
The rally in export commodity prices, stemming from supply shocks caused by the conflict, could help boost the surplus this year.