Pretoria, South Africa — ESI-AFRICA.COM — 23 March 2011 – The impact of Japan’s nuclear crisis on the South African economy is likely to be limited but if the situation worsens it could hurt, says South Africa Reserve Bank chief economist Monde Mnyande.
Mnyande explained that South Africa’s economic recovery was continuing, and that preliminary investigations had shown that while Japan was a significant commercial partner, the near-term negative impact in terms of trade linkages was likely to be limited.
“Should the situation deteriorate further to trigger a large-scale evacuation of people, the negative economic fallout for South Africa and other trade partners would be amplified considerably,” he said at a briefing here.
South Africa’s current account gap narrowed to a seven-year-low in the fourth quarter of 2010 while expenditure slowed, partly due to a moderation in household spending, the Reserve Bank said.
It added that the current account deficit had narrowed to 0.6% of gross domestic product (GDP), from a slightly revised 3.1% in the third quarter.
Analysts polled by Reuters had expected a shortfall of 2.55% to GDP.