South Africa economy: ‘No indication of real growth’

Jul 13, 2016 12:00 AM

The June BankservAfrica Economic Transaction Index (BETI) has recorded a slight improvement month-on-month, but the economy is not out of the woods.

This is according to BankservAfrica, which released the index - a measure of all South African interbank transactions under R5 million – on Wednesday.

“June’s month-on-month BETI increase of 0.3 percent was slightly higher than May’s significant drop, but it is still the smallest increase this year,” says Dr Caroline Belrose, head of Knowledge and Risk Services at BankservAfrica. “The quarterly percentage changes remain negative while the yearly increase is below 1 percent, in line with South African economic growth expectations.”

The data trend shows the South African market has been stagnant over the last two to three years, and there is no indication of real growth in the immediate future as economic transactions oscillate between negative and positive monthly growth.

“This month’s data reflects the extent of the volatility within the economy where some sectors, such as manufacturing, are showing signs of a slight pick-up, while the declining car sales records paint a picture of a distressed market,” says Mike Schüssler, chief economist at Economists dotcoza.

Along with below inflation credit growth, economic transactions indicate that bank customers are transacting more, but at a very slow rate. The actual number of transactions used to compile the BETI increased by 2.8 percent year-on-year to R86.6 million.

“Overall, this means there has been a marginal economic uptick, while remaining volatile,” Schüssler adds.

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