SARS today released trade statistics for April 2016 that recorded a trade surplus of R0.43 billion due to exports of R92.22 billion and imports of R91.79 billion.
Karl Götte– Head of Standard Bank Commercial Banking, says:
“The trade account’s year to date position has improved to R-18.6 bn when comparing it to April 2015 (R -35.8 bn) due to exports growing faster than imports. Exports grew year on year by 8%, while imports grew by 3.5%. Seasonally, a trade deficit is generally experienced in April. This surplus is not in line with market expectations.
“The economy has deteriorated further in April. The Reserve Bank has brought down projections of GDP growth to 0.6% from the 0.8% growth forecasted at the beginning of the year. Economic and business confidence may be tested by the looming possibility of a credit rating downgrade from S&P and Fitch at the beginning of June. In the event that a downgrade occurs, consumers and businesses would be further strained.”
He adds that expansion plans for businesses are likely to be influenced by economic pressure that currently exists.
“Businesses should focus on doing more with less until such time that the economy is more conducive for growth.
“The extent of volatility in the market highlights the importance for businesses to anticipate some of the challenges and develop strategies to mitigate against such challenges. Companies need to establish predictive monitoring that highlights indicative trends and constantly monitor and review these. This will enable quicker decision making which will facilitate a more adaptive business model.”