South Africa’s current account deficit shrinks to 0.7% of GDP

South Africa’s current account deficit narrowed to 0.7% of GDP in the third quarter of the year, down from 1% of GDP in the preceding three months.

In rand value, this is the equivalent of a deficit of R57 billion, a decrease from a revised R72 billion in the second quarter.

The Reserve Bank released the latest report on the Balance of Payments today, providing insights into how the country trades with the rest of the world, including exports, imports, income flows, and current transfers.

Drivers of the Improvement
The improvement in the balance largely reflects a smaller shortfall in the primary income account, while the secondary income account held steady. However, the surplus on the trade account narrowed as imports rose faster than exports.

While the trade surplus has narrowed throughout the year, exports have nonetheless proven resilient, while imports have been softer than exports. As a result, the current account has been relatively steady, hovering near 2024 levels.

Outlook: A Narrowing Trade Surplus

Looking ahead, Nedbank suggests that export volumes are unlikely to increase aggressively given that global demand will likely remain relatively subdued. Furthermore, South Africa faces significantly higher tariffs in the US market than most of its competitors.

This weaker global demand will only be partially offset by:

Robust gold and platinum prices

Steadier domestic energy supply

Smoother logistics
Nedbank forecasts that imports are likely to gain more traction as lower interest rates and a steady rand bolster domestic demand. As imports outpace exports, the trade surplus is forecast to narrow further in 2026.