SA economy slows to a crawl

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IOL economy arrows Filomena Scalise

Cape Town - BankservAfrica's Economic Transaction Index (BETI) shows that annual growth slowed to only 0.2 percent last month, the electronic payments transaction company said on Wednesday.

BankservAfrica's regulated products chief executive Brad Gillis said not even the pre-election spending of political parties could put momentum back into the economy.

“The 0.2 percent year-on-year growth in April 2014 shows one of the smallest changes in economic activity over the last year,” he said.

“On top of that, five of the last eight months indicated a month-on-month decline and only three, including April, showed an increase.”

Chief economist for Mike Schussler said political parties only spent on a massive scale once every five years and some of this spend could show in the April figures.

He said May or June could show more subdued economic activity due to the backlash of extended strikes.

“In the past, the effect of a strike was mostly felt a month or two after the strike ended. On top of this, the economy is running the risk of negative growth as a result of high consumer debt levels and the inability of the economy to create new jobs.”

Schussler said businesses struggled with the pace of economic change.

On an international front, the South African economy would feel the effects of the recent lowering of growth figures for most countries by the Organisation for Economic Co-operation and Development.

“It seems the whole economy is caught between strikes and slow international growth,” he said.

Gillis said although the BETI took public holidays into consideration, they alone could not be used as an explanation because businesses no longer closed shop on these days. - Sapa

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