The monthly BankservAfrica Economic Transactions Index (BETI) tracked lower levels in August, mirroring South Africa’s challenging economic environment.
The BETI is an early economic scorecard for South Africa in general, specifically regarding growth trends.
It correlates highly with the South African Reserve Bank’s co-incident indicator and GDP figures while appearing a quarter earlier.
On an ongoing basis, there are always minor differences between previously published index numbers and the most recent ones.
It is because of the processes of deflating – to strip out the impact of inflation from the data – and seasonally adjustment – to strip out any seasonal behaviour in the data.
The August 2022 BETI release has been subjected to the usual adjustments that result in revised index and growth numbers.
On an annual basis, the BETI contracted by 1.0% in August 2022 compared to the revised 5.3% in July.
This u-turn trend can be ascribed to the high base in August 2021, which spiked by 4.3% following the riots in KwaZulu-Natal and Gauteng.
BankservAfrica’s Shergeran Naidoo said the BETI index level moderated further to 131.6, significantly lower than the all-time high of 143.1 reached in May.
“The level in August is also the lowest since the 130.6 reading in December 2021,” said Naidoo.
The BETI decline for the third consecutive month signals the ongoing strain on the broader economy.
“The monthly contraction in the BETI is not unexpected as the economy continues to suffer from recurring load shedding, significant rises in fuel and food prices and further increases in interest rates,” independent economist Elize Kruger said.
“The global economy is struggling with similar headwinds, resulting in an extremely challenging 2022 with weak economic momentum.”
The standardised nominal value of transactions cleared through BankservAfrica in August 2022 was R1.144 trillion, while the number of transactions increased to 136.2 million from 130.4 million in July.
Despite showing a monthly growth of 4.4%, the number of transactions was still 2.1% lower than a year earlier, given the high comparison base, said Naidoo.
“In the light of the multiple headwinds, it appears the economy is simply unable to gain synchronised momentum across all sectors in the short term, and we will continue experiencing a ‘muddle-along’ scenario,” said Kruger.