Economic transactions increased again in May across all measurement periods, according to the BankservAfrica Economic Transaction Index – suggesting that SA could enjoy economic growth in the second quarter.
The BETI measures monthly transactions paid into the South African National Payments System.
This was only the second time in a year where two consecutive months of transactional growth featured on a monthly, quarterly and annual basis, according to the index report, released on Wednesday.
“The BETI, as a monthly broad ‘now’ indicator of the SA economy, shows that the depressed first quarter was unusual, but that the second quarter will show positive gross domestic product (GDP) growth,” states the BETI report.
“The BETI also tells us that SA needs more confidence, with the discussed measures needed to be implemented urgently to boost the economy.”
The BETI reflected a change of 0.1% between April and May. The quarter to May increased by 1.1% from February. On a year-on-year basis, the BETI recorded growth of 2.4%.
“Much of this improvement is due to the bounce from April for economic transactions. Along with the small increase in May, this could make for an increase in the gross domestic product (GDP) in the second quarter of 2019,” states the report.
“Just as the economic transactions crashed in the first quarter, we believe there will be some ‘catch-up’ in the second quarter.”
Recovery after ‘disaster’
The two consecutive months of growth in the BETI indicates there will be recovery after what the report refers to as “the disastrous first quarter”, which the BETI pointed to as economic transactional growth declined over that period.
“Of course, some of the April bounce was a ‘catch-up’ – and not really growth. But it is still positive that the May numbers are up. This suggests the economy is still in growth mode albeit a slow one,” states the report.
“If there is no load shedding in the next few quarters, the economy will probably continue to grow – even if at a sluggish rate.”
The total number of economic transactions fell back slightly between April and May, according to the report, probably due to the large bounce in April. Furthermore, at 101.6 million, the number of transactions were 1.2% higher than a year ago.
The standardised value of transactions was R885.8bn, which left the average value of transactions about 2.2% higher than a year ago.
According to the report, this again is lower than inflation and shows that the private sector role players are still under pressure. Many are not purchasing goods or procuring services at the rate they had previously.