Friday saw the release of both SA trade data and government budget data for the month of October. A breakdown of the data follows below.
Trade balance data:
Oct 2011 –R9 billion
Sep 2012 –R14 billion
Oct 2012 –R21 billion
(all deficits, meaning SA as a whole is exporting less than it is importing.)
Government budget data:
Oct 2011 –R10 billion
Sep 2012 –R11 billion
Oct 2012 –R24 billion
(all deficits, meaning the SA government is going into debt on behalf of the taxpayer)
So, the bottom line: As the SA government has gone into more debt (financed by loose monetary policy locally and globally), so the SA economy has run a widening deficit of trade, which has set the SA economy on another unsustainable business cycle upswing phase (that will bust in the future and result in hundreds if not thousands of business liquidations and many more job losses), and so too has the Rand weakened (which harms the poor more than it does the rich).
I wonder whether Leon Louw has anything to say about this, or is this just more econobabble?