Johannesburg - The flow of money through the financial
system is beginning to show signs of an upturn according to BankservAfrica’s
Economic Transaction Index data for December and January.
The BETI, a now-cast report, provides faster economic
information than most indicators as its data is available a month after the
event for 11 months of the year, versus other indictors, which can take between
38 and 76 days to be published.
BankservAfrica’s research shows that December and January’s
money flow represents an improvement on November. However, stripping out
inflation, there is a year-on-year decline.
Inflation is currently 6.8 percent.
“The BETI reading for January 2017 was 124.4, the same as
December 2016, showing no declines,” explains Dr Caroline Belrose, Head of
Information Services at BankservAfrica. “Taking a closer look at the
year-on-year changes, specifically for January, the BETI registered a 1 percent
decline compared to the -0.3 percent experienced in January 2016.”
Belrose adds, at the start of 2016 the economy was in
freefall, as was the BETI which tracks economic activity in near real-time via
payment transactions in the banking system.
The first months of 2016, in particular, experienced the
worst start since the same period in 2008. Last year was certainly a weak
year for the South African economy.
Despite this annual downturn, the latest BETI
month-on-month results suggest that 2017 is off to a better start than 2016.
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The fact that there was no decline between January 2017
and December 2016 – unlike those experienced in the four months previously –
provides reason to be somewhat optimistic about the economy in the months to
come.
“Although it is too early to say whether the latest
figures signal a change in trend, the improved rainfall in the northern parts
of the country together with the recovering commodity prices, suggest that the
primary economy’s prospects are faring better. This sentiment is augmented by
other industry statistics, such as the January Manufacturing Purchasing
Managers Index and new car sales,” explains Mike Schüssler, Chief Economist at Economists
dotcoza.
Adding further impetus to the turnaround argument is the
finding that the volume of BankservAfrica transactions increased by 5.8 percent
on a year-on-year basis. According to Belrose, this is the best growth
experienced since May 2013. The nominal standardised BETI was up by 6.1 percent
in January at R680 billion. As inflation cancels the nominal growth, there are
signs that nominal growth is speeding up too.
Real-time transactions clearings were up 36 percent in
nominal terms. This in all likelihood reflects the change in which people
transact. “Real-time transactions are growing strongly in the South African
payments system, albeit from a low base,” notes Schüssler.
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