Despite some predictions that the trade deficit would blow out to more than R4bn ($572m) for the month, it came in at a far more reasonable $391m, only marginally up on the $381m recorded in February, according to figures released by the South African Revenue Service (SARS) on April 30.
Overall, South Africa's trade deficit for the first three months of the year stood at $2.14bn, slightly up on the cumulative trade deficit of $2.1bn for the first quarter of 2006.
One of the factors that kept the deficit down was a strong showing by South African exports, which jumped by 13.59% in March compared to the previous month, reaching just over $6bn. However, while the growth rate of export earnings slightly outpaced the rise in imports, which increased by 12.88%, South Africa's imports bill hit a record high of $6.47bn for the month.
One factor that had an effect on both the import and export figures was the slide in the rand, which lost 18c against the US dollar and twice that against the euro in March. This both made South African goods more attractive to overseas buyers and jacked up the cost of imports.
One of the positive aspects of the trade figures was the solid growth in exports over the past year, which outstripped the rise in imports.
"Compared to the same period in 2006, cumulative imports have increased by $5.02bn (38%) and exports increased by $5bn (45%). It should be noted that, for this period, the growth in exports was higher than the growth in imports," SARS said in its statement accompanying the March figures.
The results comforted the market that was still coming to terms with the massive $1.6bn trade deficit in January and may reduce pressure on the central bank to put up interest rates to cool off the economy.
The growth in imports was driven by increased buying of foreign machinery, mechanical and electrical appliances, which rose by 26%, in part as a result of a boom in infrastructure developments around the country, many of them state-funded. South Africa has also suffered from the high cost of oil, something not likely to change in the short term.
On the other side of the ledger, South Africa's exports have been boosted by increased sales of precious and semi-precious stones and metals, which rose by 15% and machinery and mechanical equipment, up by 36%.
Few analysts are suggesting the past two months' results could point to the beginning of a trend. Though acknowledging that the March figures were positive, Azar Jammine, the director of financial advisory firm Econometrix, said there was still a long way to go.
"The fact is we are still highly dependent on capital inflows to accommodate the trade deficit," he said to local press on May 2. "Should there be a slowdown in the international economy, this would result in increased risk aversion towards emerging markets and a resultant slowdown in inflows of foreign capital."
Should this occur South Africa would be forced to reduce its imports and thus slow the pace of economic growth, he said.
As long as South Africa's exporters can maintain their strong performance, the trade deficit should remain at manageable levels. If the rand remains steady against other currencies the following months' figures will give a better indication of whether South Africa is experiencing a sustained export surge or just benefiting from fluctuating exchange rates. Then it will be time to start talking about trends.