The current-account deficit, a broad measure of the country's trade and financial dealings with the rest of the world, got another blow with a report the trade deficit in September swelled to 7.11 billion rand ($729 million) from a 5.12 billion-rand shortfall the month before.
Metals prices as a key component of South Africa's exports were hit hard in October, with gold prices falling 18%, silver down 21% and copper off 37%. Metals rallied early this week but stumbled again Wednesday, falling along with equities markets. South Africa's economy slowed substantially this year. The National Treasury recently forecast growth of 3.7% for 2008 after an average of about 5% in the last four years.
But the slowdown was already evident in January as industry struggled with electricity shortages. South Africans also were being pinched before the U.S. subprime-lending trouble, with interest-rate increases aimed at countering rising inflation. A new National Credit Act forced lenders to be stricter in their practices.
When Razia Khan, regional head of research at Standard Chartered in London, was asked, "Does South Africa belongs in the same category as Hungary or Iceland?” Fundamentally, I would think not," she said.
ETFs/Stocks :
iShares MSCI South Africa Index ETF (EZA) $33.18 -4.05 (-10.88%)Related Posts :Sources :
- The Wall Street Journal: Metals Prices, Swelling Deficit Pose Threats to South Africa, November 6, 2008
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