The current account deficit narrowed more than expected in the final quarter of 2013 as exports outpaced imports to reduce the shortfall on the trade account.

The current account deficit was at 5.1% of gross domestic product, compared with a revised 6.4% shortfall in the third quarter, the South African Reserve Bank said in its Quarterly Bulletin on Wednesday.

The bank said exports of cars and transport equipment picked up in the fourth quarter as manufacturers recovered from a strike in the previous three months.

Portfolio inflows reversed in the fourth quarter. The financial account saw outflows totalling R30.8bn, compared with R48.8bn of inflows in the third quarter.

However, other investment flows switched from outflows to inflows in the last three months of the year, the bank said.

On an annual basis the current account deficit was wider than in 2012.

Import inflation saw South Africa’s terms of trade – the ratio of export prices to import prices – deteriorate in the fourth quarter, the third consecutive quarterly fall.

The rand hit a string of five-year lows in January this year, pushing up the local price of imports. The value of merchandise imports increased 16% in 2013 compared with the previous year.