(MENAFN - AFP) South Africa's trade deficit widened sharply in July as imports jumped by 18 percent on the back of a weakened rand, according to official data released Friday.
The South African Revenue Service also reported an unexpected near 11 percent increase in exports, but that was eclipsed by surging imports, which reached record levels.
As a result the deficit swelled to 14.2 billion rand (1.4 billion), more than markets expected.
Analysts took some solace from the rise in exports.
Although the rand is trading near four year lows, there had been fears South Africa -- beset by labour disputes and fierce competition on the global market -- would be able to take advantage of its exports being cheaper.
"The rise in exports is encouraging and reflects some benefit from the weaker exchange rate and improving global conditions," said an economist at Nedbank.
"However, labour related production disruptions in the manufacturing and mining sectors will hurt export growth in the coming weeks."
Gold sector workers are expected to strike from Tuesday.
The rand seemed to weather the prospect of a widening current account deficit, but fears are growing that the weakness of the currency may be fuel a stagflationary spiral.
South African Finance Minister Pravin Gordhan told the Wall Street Journal the rand's plunge against the dollar "has gone too far" in an interview published Friday.
Gordhan hinted that intervention may be needed to prop up the currency.
"We'll have to watch the situation on a day-by-day basis and see what lessons we can learn from others and what defensive measures we can develop on our own side."
The fall, he said, "is going to, as it is in other countries, make an impact on inflation and start triggering a set of events that could be negative for growth and job creation."