Johannesburg — SA RECORDED a second surprise trade surplus in a row in July which was driven mainly by a surge in coal exports accumulated during a transport workers strike in May.

The surplus narrowed to R2bn from R5,6bn, confounding market consensus forecasts for a balanced trade outcome or a small deficit, according to official figures yesterday.

Exports rose 0,8% to R56bn compared with June while imports climbed by 8,1% to R54bn, the South African Revenue Service said.

But the figures are notoriously volatile, and most economists believe that SA will mainly record deficits over the rest of this year, as domestic demand gathers momentum, in step with the economic recovery.

"Today's data surprised once again," said Standard Bank economist Shireen Darmalingam.

"Nonetheless we continue to expect a stream of trade deficits this year, albeit milder in nature."

The cumulative deficit for the first seven months of the year shrank to R6,6bn - nearly a third of the size in the same period last year, when it amounted to R18,4bn.

During this period , exports have climbed 10,2% while imports have lagged at 5,8%.

Stanlib economist Kevin Lings said the trend was "encouraging" given that the rand had been strong - which generally reduces the competitiveness of local exports.

"Looking forward over the next few quarters, SA's exports are likely to struggle to accelerate significantly given the still strong rand and fairly modest world recovery." he said. But with import demand likely to remain "fairly modest" given the still weak domestic economy, the deterioration should be "manageable".

The rand has appreciated by more than 5% against a trade weighted basket of currencies this year.

Absa Capital economist Jeffrey Schultz said that SA's trade deficit was likely to remain "well contained" for the rest of this year, with average monthly deficits of R2,9bn.

He predicted the current account deficit, a country's broadest measure of trade in goods and services, at just over 4% of gross domestic product this year, roughly the same as last year during the recession.

Yesterday's figures showed that exports of mineral products, mainly coal, surged 23,4% in July versus June. Exports of vehicles and related parts, as well as electrical equipment, both rose 6,4%. On the imports side, mineral products - mainly oil - also surged by 23,3% and chemical products by 9,9%. Vehicles and equipment imports also rose by 8,8%.