Preliminary indications are that the deficit widened again in the fourth quarter of 1997, although the deficit for the year as a whole remained well below the R10 billion level. A third very encouraging development last year was the return of foreign investor confidence and a substantial increase in the net inflow of capital from the rest of the world.
After slumping from R19.2 billion in 1995 to only R3.9 billion in 1996, the total net inflow of capital through the balance of payments recovered again to R20.2 billion in 1997. The net inflow of long-term capital indeed amounted to about R30 billion, which was partly neutralised by a net outflow of R10 billion in short-term funds.