The BankservAfrica Economic Transactions Index (BETI) for December 2022 improved despite the ongoing, dismal economic context.
After six consecutive months of declines, the BETI rose to an index level of 132.1 in December, almost on par with the January 2022 level of 132.8.
On an annual basis, the BETI increased by 1.7% vs a revised decline of 0.9% in November.
The monthly, quarterly, and annual improvements all signal some improvement in the broader economy.
“The welcomed improvement to the BETI occurred against the broader economic context that has remained fairly grim during December,” said independent economist Elize Kruger.
She highlighted that load-shedding, interest rates, and inflation remained elevated, and the global economic slowdown gained momentum.
The latest movement in the BETI is a reflection of the South African economy’s resilience.
The annual festive season spending also contributed to the number of electronic transactions pushing to an all-time high of 143.6 million – an 11.4% year-on-year increase.
The standardised nominal value of transactions cleared through BankservAfrica was R1.3 trillion in December.
The same positive trend was mirrored in the Absa Purchasing Managers’ Index, which increased from 52.6 in November to 53.1 in December.
It ended the difficult year for the manufacturing sector at the highest level in seven months.
Meanwhile, the S&P Global South Africa PMI, which reflects activity in the broader private sector, slipped to 50.2 in December after the 50.6 tracked in November.
Vehicle sales moderated somewhat in December, though as a seasonal phenomenon.
Overall, 2022 was characterised by an economic scenario of ‘muddle-along-little-thriving’ as multiple headwinds plagued the economy.
“The BETI ending December slightly below the January 2022 index level confirms this reality,” explains Kruger.
While the improvement in the BETI for December is encouraging, there are indications that South Africa could expect ‘more of the same’ in 2023.
Headwinds, which include load-shedding and households under pressure from elevated inflation and interest rates, are likely to remain.
All indications also point to a less supportive global environment, as the International Monetary Fund recently warned that a third of the global economy could be in a recession this year.
It adds to the risks for the South African economy from an export and commodity price perspective.
One silver lining is the expectation that consumer inflation should moderate and provide some relief for many South Africans.