S.Africa's July trade surplus at 2.0 billion rand

JOHANNESBURG (Reuters) - South Africa's trade balance remained in surplus in July, with exports edging up slightly while the monthly rate of increase in imports was higher, but off a low base.

The trade surplus for July was narrower at 2 billion rand in July compared with 5.6 billion rand in June, the South African Revenue Service said on Tuesday.

Exports were up 0.8 percent at 56 billion rand in July compared with the month before, while imports increased by 8.1 percent to 54 billion rand.

SARS said the cumulative deficit for the year to date stood at 6.6 billion rand compared to an 18.4 billion rand shortfall at the same time last year.

The trade data is generally volatile and difficult to forecast, with economists polled by Reuters having predicted a surplus of 300 million rand.

"That is a very healthy surplus, I think what is encouraging is that imports at least ticked up, because imports give you a good indication of domestic spending. So that shows that there is life in domestic spending," said Citadel economist Dave Mohr.

"It's probably a bit of a disappointing rise in exports, that would be because of a stronger rand and flat commodity prices over the period."

Both the government and the Reserve Bank have reiterated concerns over the relative strength of the rand, saying it undermines exports and ultimately an economy struggling to recover from last year's recession.

The rand was however softer at 7.4295 against the dollar at 1230 GMT, from 7.4049 before release of the data at 1200 GMT.

Latest available data shows the trade balance weighed on the current account in the first quarter of this year, with the current account widening to 4.6 percent of GDP compared with a 2.9 percent shortfall in Q4, 2009.