Cape Town - The SA economy is still shrinking, but less so than in September in terms of quarterly changes and despite a month-on-month upturn.
This is according to the latest BankservAfrica Economic Transaction Index (Beti) released on Wednesday. It measures South African payment system transactions, smaller than R5m, giving a broad picture of the current South African economy.
October saw a higher number of payment system transactions under R5m than those recorded in September, indicating that the decline in previous months has been slightly arrested.
There have been five monthly declines in 2015 so far, but the index has remained positive compared to where it was a year ago. This is mainly due to a strong end to 2014 and a strong February 2015.
According to the latest Beti, the real value of economic transactions in the economy continues to show an increase. The year-on-year increase, however, has declined in line with the months of negative growth that slowed the positive annual trend. The month of positive data now gives the fourth quarter an improved outlook.
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“Overall, the transaction volumes are indicative of a very weak economy that is not experiencing significant growth,” explained Mike Schüssler, chief economist at Economists dotcoza.
“October is the first month with a positive increase in the last four months, and only the second increase in the last six months on a month-on-month comparison. This indicates that concern about economic conditions remain, but that the economy is showing a degree of resilience.”
At the same time, for the third month in a row, the actual number of transactions declined.
“Overall the transaction volumes declined by 0.7% when compared to a year ago, while the actual transaction values have increased. This is the third consecutive month of declines when compared to this time last year,” said Dr Caroline Belrose, head of fraud and data analytics at BankservAfrica.
“Generally the Beti has grown faster than inflation over the last year, but not by much. The standardised Beti recorded a value of R719.5bn, which was 6.5% higher on a year ago. The standardised value adjusts for the number of weekdays and weekends which has an impact on the actual Beti.”
While the Beti continues to indicate that a further decline in gross domestic product (GDP) in the third quarter is the likely outcome, the chances of another quarter of decline have shrunk from about 80% to about 70%.
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