Share

SA suffers economic stagnation - index

Johannesburg - South Africa avoided a technical recession, but sporadic economic growth was not enough to shake off economic stagnation, according to BankservAfrica's Economic Transaction Index (Beti) released on Wednesday.

The Beti showed the economy recovered a little in June 2014, but not enough to stop the economic decline, BankservAfrica corporate reputation head Michael Rubenstein said in a statement.

A technical recession is defined as two consecutive quarters of negative gross domestic product growth.

In June, the Beti dropped 0.5% compared to a year ago, and was less than the month before, despite stronger quarter-on-quarter growth of 1.4%.

"The fact that the strike in the platinum sector ended probably had very little influence on the Beti in June," Rubenstein said.

"So we believe that the stronger monthly improvement must have come from sectors outside of manufacturing and mining."

Timing of growth

Mike Schüssler, chief economist at economists.co.za, found the timing of growth strange.

"The reason for the uptick may be that people who have held back on buying things or increasing inventories may just have been unable to delay purchases any longer," Schüssler said.

"Or perhaps consumers were more relieved than expected by the short-lived decline in the price of fuel in the last two months."

The other trend the Beti appeared to show was the month's weakest data followed the end of large industrial action.

With further strike action underway, it was likely the weakest Beti growth numbers could still lie ahead.

This was as actual working days lost in the first half of the year, due to industrial action, were estimated to be around nine million.

Strike-laden performance

"It is important to note that a large piece of our headline number seems to have more to do with the poor, strike-laden performance in 2013 rather than with the robustness of the last few months," Schüssler said.

"The current growth is not fast and it is also not certain. Therefore, the best we can say is that a technical recession was avoided."

Rubenstein said while transactions were "strongly" up 9.7% in nominal terms before adjusting for inflation, in real terms they were lower than a year ago, having fallen by 7.5%.

The Beti indicated that second quarter growth would be between one and 1.5%, which meant gross domestic product growth for the year, up to the second quarter, was going to be around 1.3%.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders