South Africa

Research evidence excerpt

South Africa

first shortfall since March 2024 and a

sharp downside surprise versus expectations of a R12.8bn

5 surplus (Figure 3). The deterioration reflected a 14% m/m sa

decline in exports to R172.1bn, driven by weaker precious

metals and mineral shipments, with gold and PGMs prices 4

under pressure, alongside continued softness in vehicle

exports. At the same time, imports rose by 0.6% m/m to

1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 R178.4bn, led by higher fuel and transport-related imports,

Source: Bureau of Economic Research (BER), Haver Analytics including increased oil purchases. While the cumulative Jan–

May surplus was up almost 40%oya, mainly on stronger pre-

We think the wider gap between inflation expectations vs. tar- cious metals exports, the May outturn points to weaker trade

get is the main argument for the SARB to consider tightening momentum into Q2, with the balance increasingly exposed to

in July. Further reasons are a general upward drift in services softer commodity prices and elevated fuel imports.

inflation and the risk of a possible El Nino food inflation

impact. Yet, lower oil prices and the related improvement in Figure 3: South Africa-Trade balance

the near-term inflation profile will make this a close call for Rbn sa, both axis

Exports (RHS) Imports (RHS) Trade balance

the July meeting. For some MPC members, the May hike was 40 200

already executed in anticipation of a worsening in inflation 30 150

expectations, while further key data (such as quarterly hous- 20 100

ing inflation) are not available sufficiently early ahead of the 10 50

July MPC meeting to provide guidance. 0 0

-10 -50

-20 -100

Our revised oil assumption of $75-$80/bbl for Brent in the

-30 -150

near term shaves 0.5%pts off the 2H26 profile and prompts a

-40 -200