The deficit on the current account narrowed much more than expected to 5.1% of gross domestic product (GDP) in the fourth quarter of 2013 from a revised 6.4% (previous 6.8%) in the third quarter, Reserve Bank data show.

A BDpro median consensus forecast from a survey conducted among 10 economists was for a current account deficit of 5.5% of GDP. The Bank released its quarterly bulletin for the fourth quarter on Wednesday.

The deficit for 2013 was recorded at 5.8% of GDP compared with a shortfall of 5.2% in 2012.

The current account records South Africa’s trade with other countries as well as dividend payments to and receipts from the rest of the world.

The better than expected fourth quarter current account deficit was a result of an improvement in the trade deficit which occurred due to higher exports and a moderation in import growth in the fourth quarter.

“The marked improvement in the current-account balance – was mainly due to a substantial decrease in the value of merchandise imports,” the Bank said. The value of imported goods receded by R37bn or by 3.6% in the fourth quarter following an increase of almost 6% in the third quarter.

“The sustained depreciation in the exchange rate of the rand – exerted upward pressure on the rand price of imported goods,” the Bank said.

The value of exports also improved in the fourth quarter supported by stronger demand for domestically produced goods amid firm global growth and the weak rand. The value of merchandise exports rose by 1.8% in the fourth quarter after a strong increase of 7.1% in the third quarter. Overall export volumes amounted to 19.8% of GDP in 2013 compared with 19.2% in 2012.

South Africa recorded lower dividend receipts from the rest of the world in the fourth quarter, which saw the deficit on the services, income and current transfer account widen by 7.5% from the third quarter to the fourth quarter.