Johannesburg - July’s BankservAfrica Economic Transaction index (Beti) showed South Africa’s economic activity was “dramatically slowing again” and the quarterly drop in interbank transactions had the biggest decline in 18 months.
The Beti is a measure of all South African interbank transactions under R5 million.
South Africa is battling slowing growth - the Reserve Bank forecast zero percent growth this year - with increased levels of households under financial strain and high levels of unemployment.
Economic transactions declined significantly in July, recording a real value fall of minus 0.2 percent on a year-on-year basis, according to Beti, released yesterday. This was also the most significant fall on every measure and for all usual periods for the Beti.
“This data shows there is a broader slowdown among all of the country’s main economic sectors at present,” said Mike Schussler, the chief economist at Economists.co.za.
While gross domestic product (GDP) showed that the large drop in mining caused the economic decline in the first quarter, the Beti now indicated a broader economic slowdown in the third quarter after a more positive second quarter, he said.
“The quarterly and monthly levels also declined by minus 3 percent and minus 1.2 percent, respectively. July seems to have been a particularly weak month with economic transactional activity closely aligned with January and May’s low figures,” said Caroline Belrose, the head of fraud and data analytics at BankservAfrica.
The report said: “Electronic credit transfers via electronic funds transfer did not show any nominal growth at all, while normal debit orders were down.”
Schussler said: “The higher interest rates and slow economic growth is slowing consumer spending, which will, in all likelihood, continue in the short-term.”
Only real time via electronic clearing showed a meaningful increase. However, this could be the result of the general shift away from cheque-based transactions.
The volume of transactions going through the payment system via BankservAfrica slid by minus 1.2 percent, Belrose said. The total nominal value before standardisation also showed a decline. The standardised value of the Beti was R749 billion.
While the second quarter GDP growth was likely to be far more positive than the negative first quarter figures, the data suggested that the economy was off to a bad start.
BUSINESS REPORT