SA’s current account deficit almost doubled in the second quarter, widening to R82.8bn from a revised R47.8bn in the first, as weaker exports and larger payments to foreign investors weighed on the country’s balance with the rest of the world.
As a share of GDP, the deficit expanded to 1.1% from 0.6%, the Reserve Bank said on Thursday.
The current account is the broadest measure of SA’s trade and financial dealings with the rest of the world. It captures what the country earns from exports and investment income and what it spends on imports, services and payments to foreign investors. A deficit means more money flowed out than came in during the period.
The weaker balance raises fresh risks for the rand and highlights how global headwinds and foreign investor payouts are straining SA’s finances. One reason for the bigger gap was a smaller trade surplus. The surplus fell to R177.1bn in the second quarter from R211bn previously, as export earnings fell more sharply than imports.
The value of exports of goods and services dropped by R23.3bn as SA shipped fewer goods, while imports rose R8.2bn, mainly because the prices of those goods were higher.
Commodity prices
According to the Bank, SA’s terms of trade, the ratio of export prices to import prices, weakened in the second quarter as import prices rose faster than export prices. This meant the country paid more for goods coming in while earning relatively less for those it sold abroad, reducing the usual boost that strong commodity prices, including gold, provide to export revenues.
“The higher price of imports in the second quarter of 2025 was driven by mineral products, mainly the refined petroleum products. Also, there was a slight increase in the prices of imported vehicles and transport equipment,” the Reserve Bank said in response to Business Day questions.
“While the average exchange value of the rand appreciated against the dollar in the second quarter of 2025, it depreciated against most major currencies and this exerted pressure on import prices of both goods and services in the second quarter.”
Responding to questions on export performance and the effect of US tariffs, the Bank said the overall value of vehicle exports rose in the second quarter, driven by higher shipments to Germany and Belgium. However, it said exports to the US declined further, continuing a trend that began in the first quarter as exporters adjusted ahead of the 30% tariffs.
Key points:
- Deficit rose to R82.8bn (1.1% of GDP).
- Driven by weaker exports, higher investor payouts.
- Trade surplus fell to R177.1bn.
- Export earnings down R23.3bn, imports up.
- Import prices rose, esp. fuel & vehicles.
- US exports fell due to 30% tariffs.
- Vehicle exports to EU improved.
- Income deficit hit R173bn.
- July trade surplus at R20.3bn.
- Deficit expected to persist in 2025.
Commenting on improvements in domestic logistics, the Bank said such improvements at the ports in particular “are somewhat contributing positively to the trade flows, especially the exports of vehicles and agricultural products”.
The overall deficit on the services, income and current transfer account was little changed at R259.9bn in the second quarter, with small improvements in services and transfers offset by a larger income shortfall.
The deficit on the primary income account alone widened to R173bn, as dividend, profit and interest payments to foreign investors increased. As a share of GDP, the broader shortfall eased slightly to 3.4% from 3.5%, though these regular outflows weigh heavily on SA’s external balance.
Looking forward to whether the Bank expected a sharper impact in the third quarter’s current account data, it mentioned July’s trade statistics numbers recorded a smaller trade surplus.
Business Day reported that SA recorded a preliminary trade surplus of R20.3bn in July, slightly lower than June’s revised R21bn, driven by mineral and metal products. The SA Revenue Service “will publish the August trade statistics [at the] end of September, which would provide an indication for the third quarter’s current account data”, the Bank said.
Weak trade
Nedbank economists expect the current account balance to remain in deficit this year due to a weak trade performance.
“Though exports have shown some resilience thus far, several downside risks persist, including a generally unfavourable global economic climate and subdued growth among key trade partners. Geopolitical uncertainties also add to these challenges,” they said.
On the positive side, Nedbank said, the robust gold price, the recent rise in platinum and coal prices, and improvements in logistics will partially offset the downside risks.
“Conversely, imports are likely to increase due to a favourable domestic environment, characterised by subdued inflation, higher real incomes, lower interest rates and a resilient rand. The non-trade deficit will persist as stronger domestic growth supports corporate profits and dividend payments, while dividend receipts slow due to a weak global environment.”
According to Nedbank, services income is expected to rise as tourism continues to recover.
Update: September 11 2025
This story has been updated with comment by the Reserve Bank and Nedbank.
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