• The Reserve Bank pointed to merchandise exports decreasing more than imports.
• The balance on the current account of the balance of payments went from a R63.4 billion surplus in the first quarter to a R103.6 billion deficit in the second quarter. 
• The Reserve Bank said the impact of Covid-19 on the economy was unavoidable and world trade volumes continued to contract into the second quarter of 2020.

The South African Reserve Bank on Thursday announced that the current account of balance payments switched from a surplus of R63.4 billion in the first quarter of 2020 to a deficit of R103.6 billion in the second quarter of 2020. 

According to the Reserve Bank, this was the only surplus since the first quarter of 2003. The Reserve Bank pointed to merchandise exports decreasing more than imports for the deterioration of trade balance. 

"Consequently, the current account balance as a ratio of gross domestic product (GDP) reverted to a deficit of 2.4% in the second quarter of 2020 from a surplus of 1.2% in the first quarter," the Reserve Bank said.

The Reserve Bank said the adverse impact of the Covid-19 pandemic on the economy was unavoidable and world trade volumes continued to contract into the second quarter of 2020.

"As a result, South Africa's trade surplus more than halved from R201.7 billion in the first quarter of 2020 to R91.5 billion in the second quarter," the Reserve Bank notice said.

The notice also said the deficits of all three sub-accounts widened in the second quarter and the deficit on the services, income and current transfer account as a ratio of GDP widened from 2.7% in the first quarter of 2020 to 4.5% in the second quarter of 2020.

"The shortfall on the services, income and current transfer account widened noticeably to R195.1 billion in the second quarter of 2020 from a relatively small deficit of R138.2 billion in the first quarter," the notice said.

In March the SARB announced that South Africa's current account deficit narrowed to a nine-year low in the fourth quarter of 2019 with decreased outflows.