Given our strong infrastructural expenditure programme and high crude oil prices, our import demand is expected to remain strong. This means that we have to continue to rely on continued capital inflows, or else we need to improve our export performance. Clearly, from a sustainability perspective the latter would be preferable.
Unfortunately our export performance has not kept up with imports, despite the significant increase in commodity prices. Over the past few years, when the economy was growing at rates above 5 per cent, the bulk of net capital inflows were into the equity markets. The sustainability of these flows is, however, not only dependent on domestic developments.