Given the larger shortfall on the services and income account with the rest of the world and the somewhat subdued performance of South Africa’s exports – notwithstanding the buoyancy of international commodity prices, the current account of the balance of payments registered a deficit equivalent to 6.4 percent in the first quarter of 2006.
Interestingly, as others have observed, despite the sell-off in emerging markets since May, nonresidents have remained net buyers of South African financial assets and there have been significant investment flows into South Africa over the past year. Non-resident investors bought a net R13 billion worth of South African equities during May 2006 and R460 million the first half of June 2006.