Following a sizeable surplus of R18.7bn in May‚ the trade account is forecast to have yielded another surplus in June — in the region of R10bn‚ according to Investec economist Kamilla Kaplan.

Month to month trade figures are often volatile but importantly on a trend basis‚ the trade deficit has narrowed substantially‚ she points out.

 “This performance has been underpinned by export growth outpacing import growth. Weak domestic economic activity has resulted in a compression of both capital and consumption goods imports.

 “On the export front‚ the value of most commodity and vehicle exports has risen compared to the same period last year. However‚ SA’s full export potential is being partly inhibited by subdued international trade activity‚” says Kaplan.

The trade account figures for June will be released on Friday‚ the same day that the M3 money supply and private sector credit data for June will be released.

This week also sees the release on Thursday of producer price inflation (PPI) for June‚ as well as the leading economic indictor for May.

“ Private sector credit extension is forecast to have increased to 7.3% year on year (y/y) in June from 6.6% y/y previously‚ with lower base factors providing a lift.

 “Underlying credit dynamics remain broadly muted amid a higher interest rate environment and depressed business and consumer confidence. In addition‚ relatively tight lending criteria are likely weighing on loan supply‚” says Kaplan.

She adds that PPI inflation data for June could reflect a slight rise to 6.6% y/y from 6.5% y/y in May.

 “Cost pressures are likely to stem from the seasonal hike in electricity prices. Typically most of increase is captured in June and with a smaller follow through to July. However‚ Eskom’s average tariff increase in 2016 amounted to 9.40% compared to 12.69% in 2015.

 “Additionally‚ manufactured food price growth is likely to have remained elevated on the strong price increases earlier in the supply chain‚ linked to drought effects‚” notes Kaplan.