Growth rate slowing down again - report

Cape Town - Recent developments in South Africa concerning the change in minister of finance and the subsequent downgrade of South Africa’s foreign and local currency ratings may have contributed to the growth rate of the BankservAfrica Economic Transaction Index (Beti) slowing down again in April.
 
The Beti deteriorated on a monthly and annual basis with only the quarter-on-quarter comparison remaining the same.
 
The real change in processed economic transactions by BankservAfrica on a year-on-year basis remained negative in April, declining by 1.8% from March, according to the Beti report.

This indicates that the economy remains under stress. The decline is at the same level as December 2016 and worse than the decline of -1.3% in March.

The monthly change was still positive as the Beti increased by 0.2% between April and March. However, this is weaker than March and February where a 0.5% growth was reflected between the two months.
 
"While these changes do not necessarily confirm a trend, the fact that the Beti has slowed indicates that some economic activity retreated in April and the downgrades of the South African economy probably played a role," according to the report.

"Furthermore, the weaker Beti – the broadest and early co-incident indicator of transactions - gives concrete evidence of a slower economy, and are in line with vehicle sales and manufacturing PMI results, which both track and provide similar insight into the economy’s movements."
   
Transactions in April
 
The number of transactions declined by 2.6%, year-on-year, after a strong 7.6% rise in March. This provides further evidence of a weaker economic environment.
 
The standardised Beti increased by 3.8% before inflation. This figure also takes into consideration the number of weekdays and public holidays.

The standardised value reached R795.2bn in April from 85.5 million transactions.

"The next few months will be very important in determining the future direction of the South African economy as well as the speed of growth or decline in the medium term," according to the report.