South Africa's deficit widened to R160.7-billion in the second quarter (Q2) of 2023 from a revised R63.7-billion in Q1, central bank data showed on Thursday. It's a trend that bodes ill for the rand.

South Africa's deficit on the current account of balance of payments - the broadest measure of trade in goods and services with the rest of the world - unexpectedly narrowed in Q1, providing the rand at the time with some much-needed support.

That positive trend reversed in Q2 when it widened to R160.7-billion from a revised R63.7-billion in Q1. The current account deficit as a ratio of gross domestic product (GDP) widened to 2.3% in Q2 from 0.9% in Q1, according to the South African Reserve Bank.

This was in line with a Bloomberg median forecast of economists which helps to explain why the rand took the data in its stride, making marginal gains to 19.16/dollar from 19.24/dollar just before it was released.

South Africa's trade surplus, meanwhile, narrowed from R110.6-billion in Q1 to R31.1-billion in Q2.

"South Africa's terms of trade (including gold) deteriorated in the second quarter of 2023 as the rand price of imported goods and services increased, while that of exports decreased," the central bank also said.

This points to cooling commodity prices as global economic growth - while not as fragile as previously expected - slows compared to last year and China's recovery remains faltering....