PRETORIA, South Africa's foreign direct investment swung to inflows in the first quarter from outflows in the final quarter of last year as domestic private firms received equity and debt funding from foreign parent companies, the central bank said.
Foreign direct investment inflows totalled 11.7 billion rand ($825.85 million) in the first three months of 2019 from outflows of 8.2 billion rand in the previous quarter, the South African Reserve Bank (SARB) said in its Quarterly Bulletin.
The country registered portfolio investment inflows of 29.2 billion rand from January to March from outflows of 33.9 billion rand in the prior quarter as foreigners acquisition of domestic debt securities exceeded net sales of local equities, the SARB said.
The bulletin also noted that the Rand depreciated in the aftermath of the national elections due to policy uncertainty and the larger-than-expected contraction in the domestic economy in the first quarter of 2019.
According to the SARB report, the first quarter of the year was characterised by severe electricity-supply disruptions, and continued weak business confidence and caution ahead of the national elections in May.
Real gross domestic product (GDP) contracted sharply by an annualised 3.2% in the first quarter of 2019 � the largest decrease since the first quarter of 2009 � but remained unchanged when measured over four quarters. The contraction was broad-based with real output decreasing in the primary, secondary and tertiary sectors, and in seven of the ten subsectors, the report reads.
The SARB report notes that the inflow in the first quarter of 2019 comprised mostly short-term loans to the domestic private non-banking sector, which was partly offset by non-residents' withdrawal of deposits from domestic banks.
Source: Nam News Network