The BankservAfrica Economic Transactions Index (BETI) fell in March, to reach its lowest point in almost two years, reflecting the growing weakness in the economy.
Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements, said on Wednesday that the BETI reached an index level of 130.2 in March, the lowest since the 130.1 reflected in December 2021.
This reflected the growing weakness in the economy on a monthly basis. The index was 0.5% lower than in February, Naidoo said.
However, the payment clearing house said the further moderation in the BETI during March was not unexpected as the dismal economic environment prevailed.
Ongoing load shedding, a further 50 basis-points hike in interest rates and inflation remaining sticky (especially food price inflation) were all factors that were holding the economy at ransom.
Early indications suggest economic growth stagnated in quarter one, with the BETI signalling the strong possibility of a negative quarterly growth rate in quarter one 2023. The March BETI was 1.7% lower than in the quarter ending December 2022.
The standardised nominal value of transactions that cleared through BankservAfrica in March was R1.19 trillion compared to February’s R1.17 trl, while the number of transactions increased notably from 133 million in February to an all-time high of 149 million in March 2023, a monthly increase of 12.1%, according to Naidoo.
Independent economist Elize Kruger said it was becoming increasingly clear that the weakness in the economy had become quite broad-based with most sectors under severe pressure.
Kruger said the ongoing moderation in the BETI, after only two months of marginal improvement in December last year and January this year, confirmed that the environment remained challenging and that the economy remained in a ‘muddle-along-little-thriving’ narrative. “While actions were recently taken and projects have been announced in the energy and transport sectors of the economy, South Africans should prepare themselves for ‘more of the same’ for longer than hoped for,” she said.
Investec economist Annabel Bishop said household finances were under pressure, with salaries weakening in both real and nominal terms and confidence was low.
“Early consumer data for February shows that the BankservAfrica Take-home Pay Index, or BTPI, continues to contract on the year, by -1.8% y/y in February in nominal terms (to R15 186 monthly) and -8.3% y/y in real terms (R14 225).
“The actual number of salaries, as opposed to the rand value, fell on a monthly basis in December and January but BankservAfrica says ‘less than a thousand jobs were created in February’, as ‘the job market stabilised’.
“The fall in annual salaries, both in nominal (or actual), and real (or inflation adjusted terms) should be viewed against the difficult environment businesses face in South Africa’s high operating cost environment, due not least from electricity load shedding,” she said.
Bishop added that companies were also operating in a high interest rate environment, the highest in 14 years, which was adding to the restrictive conditions, while economic demand is subdued, and inflation was still high historically for South Africa, near 2009 highs.
BUSINESS REPORT