Sanisha Packirisamy, Chief Economist at Momentum

So what?

South Africa’s (SA’s) current account deficit narrowed at 0.4% of GDP in the fourth quarter of 2024 (0.8% in the third quarter), lowering the country’s external vulnerability. The annual current account deficit was also narrower at 0.6% of GDP in 2024 (1.6% in 2023). Furthermore, the 2024 outcome was better than the SA Reserve Bank’s (SARB) estimated deficit of 1.2% of GDP. Moving forward, SA’s current account deficit is expected  to widen to 1.9% of GDP in 2025 and 2.6% in 2026. The narrower-than-expected deficit in 2024 introduces the potential for downward revisions in these estimates.

However, the steel and aluminium tariffs already applied by the United States (US) administration, potential reciprocal tariffs on SA and global protectionism could lead to a wider deficit through reduced exports, slower investment flows and a weaker rand.

Read Momentum’s full report here.

ENDS