JOHANNESBURG: South Africa has cut its 2012 trade deficit to about a third of the previously stated shortfall after adjusting the data to incorporate trade with its neighbours, the national revenue service said on Thursday.
The revision will likely reduce the current account gap for Africa's biggest economy, which has persisted at around 6 percent of GDP and piled pressure on the rand.
The currency firmed after the South African Revenue Service (SARS) said it had revised down the 2012 trade gap to 34.6 billion rand ($3.4 billion) from a previous 116.9 billion rand after adding the positive balance with Botswana, Lesotho, Namibia and Swaziland (BLNS).
It also halved the cumulative shortfall for the year to September to about 64 billion rand.
"The view is ... that direct trade within the BLNS countries should be included in the calculation of the monthly trade statistics to provide a more accurate reflection of South Africa's trade," SARS said.
Historically, transactions with the four countries have not been included in the trade statistics because of the free flow of trade under the Southern African Customs Union.
With the adjustments, South Africa's 24.6 billion rand trade deficit for 2011 has turned into a 44 billion rand surplus.
Earlier, government sources told Reuters the adjustments were expected to have an impact on recent gross domestic product (GDP) numbers.
In his medium term budget statement last month, Finance Minister Pravin Gordhan cut 2013 GDP growth expectations to 2.1 percent from the 2.7 percent forecast earlier, but vowed to keep state spending in check.
Revised balance of payments data will be finalised in the next few weeks and published in the Reserve Bank's quarterly bulletin on Dec. 3, the central bank said in a statement.
South Africa has grappled with chronically wide trade deficits as it slowly recovers from a recession in 2009 when demand from key markets like Europe withered, leading to a yawning current account gap currently seen averaging 6.4 percent of GDP through to 2015.
The timing of the trade adjustments could be aimed at deflecting the negative impact of South Africa's inclusion among the "fragile five" economies seen by market analysts as most vulnerable to a withdrawal of U.S. monetary stimulus.
"We are very suspicious of the timing now - when government is very annoyed at its inclusion as a stressed country and a 'taper target'," said Nomura analyst Peter Attard Montalto.
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