With the inclusion of the May data, the cumulative trade surplus totals R19.5bn for the first five months of the year, which contrasts with the R13.3bn deficit registered in the same period of 2016. In the January to May 2017 period, exports rose 6.1% y/y to reach R464.8bn whilst imports fell by 1.3% y/y to R445.3bn.


Commodity price increases and improved global demand will have contributed to the improvement in export dynamics. In particular, the value of exports of mineral products and precious stones rose by 41.5% y/y and 4.7% y/y respectively, in the first five months of the year.


In terms of the manufacturing industry, exports of vehicles fell 12.9% y/y and machinery and appliance exports decreased 14.1% y/y during January - May. This would suggest that the local manufacturing industry is not fully benefiting from the strengthening in aggregate global demand.


On the import front, in the year to date, the value of vegetable product imports fell 28.7% y/y following a substantial increase of 37.9% y/y in 2016. This is likely linked to the dissipation of drought conditions in most of the country and the expected record maize harvest. Machinery and appliance imports contracted by 12.2% y/y and textile and clothing imports fell by 10.1% y/y, reflecting the weak domestic consumption and investment climate.


The improvement in the trade account is expected to be sustained this year, with the economy projected to achieve only modest economic growth amid depressed business and consumer confidence. As such, import growth should remain well contained. Exports should derive some support from the synchronised lift in global growth and trade.