Index reveals South Africa’s economic system is shrinking

The BankservAfrica Financial Transactions Index (BETI) slumped in November, pointing to a different month of sluggish financial exercise in a slowing South African economic system.

The recorded financial transactions, measured by the automated clearinghouse, decreased from 127.3 to 125 factors in November, the bottom degree since February 2021. There was a 1.7%
quarterly decline whereas the seasonally adjusted actual month-to-month change for the worth of transactions shrank by 1.8%.

“With 4 of the final six months recording month-to-month actual declines on a seasonally adjusted foundation, and with one month recording no change, the present South African economic system appears to be declining once more,” stated Mike Schüssler, chief economist at Economists.co.za.

“At 125, the BETI Index for November 2021 was a 2.3 level fall from October 2021 – and an extra 6.2 level decline from September 2021,” stated Shergeran Naidoo, BankservAfrica’s head of Stakeholder Engagements. “Within the final three months, the BETI numbers have weakened.”

BankservAfrica processes and settles hundreds of thousands of interbank transactions day by day, and due to this fact offers an excellent indication of the actions within the native economic system by means of the BETI, which is a nowcast indicator of the path of the financial move.

The BETI additionally recorded a quarterly decline in September 2021, echoing Stats SA’s reported GDP fall of 1.5%.

Quarter-on-quarter proportion change within the BETI and SARB Co-Incident Index

The best level within the BETI degree for 2021 was in August – a really robust, uncommon month that includes a wholesome rebound after the July unrest and riots in KwaZulu-Natal and Gauteng, BankservAfrica stated. Since August, nevertheless, the general BETI degree has declined by 4.7%.

Load shedding has been a significant problem for the South African economic system, together with different points corresponding to water outages and cable theft, the group stated.

In November 2021, load shedding reared its ugly head once more – however the financial transactions slowdown was already there in October. Though the Municipal Elections on 1 November 2021 offered some reduction, load shedding earlier than and after the elections performed a task in rising inactivity within the economic system.

“General, the BETI signifies that 2021 has been a yr of two halves: the primary half recording an rising GDP and the second half reflecting a declining economic system,” stated Schüssler.

BankservAfrica famous that the common worth per transaction was 8% decrease year-on-year in nominal phrases, because of the greater inflation. The standardised nominal worth of transactions stays above R1 trillion and stood at R1 061 trillion in November 2021 – the second-highest on report.

Quarterly proportion change of South Africa GDP and BETI (2019 – 2021)


Learn: South Africa’s GDP shrinks by 1.5% as lockdowns and looting chunk

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