Economic Transaction Index shows South Africa’s economic transactional activities and its economy at large is in a state of volatility.

CAPE TOWN - BankservAfrica’s Economic Transaction Index (BETI) for June showed that South Africa’s economic transactional activities and its economy at large is in a state of volatility with the uncertainty amongst businesses and individuals being the only continual.


Monthly transactional activity, measured by BankservAfrica’s national payment system has grown by 0.4 percent between june and May after it declined by -0.1 percent between May and April.


However, the June BETI, declined by 0.4 percent on year-on-year basis and this downward trend has been ongoing since October 2016 and is the lowest in that period.


Economists dotcoza, Chief Economist, Mike Schüssler said: “This changing data suggests that economic activity wants to pick up. This, however, is being crushed by short-term shocks. All these shifts give the impression that the economy is shifting when, in fact, it is not moving at all. It is flat.”


Economy transactional activity is likely to be in a state of constant volatility in the long term. Looking back on the last 42 months, it shows that monthly changes on the BETI registered 45.2 percent in declines, 4.8 percent showed no change while 50 percent of the monthly movements showed growth.


Likewise, the South African economy declined by 38.5 percent in the quarters measured in this time period and grew 61.5 percent of the time. Furthermore, 23 percent of this period recorded GDP growth of less than 0.5 percent while 23 percent showed growth higher than the population growth of 1.7 percent.


“The constant change in direction of the BETI suggests that the economy will remain low to flat in the immediate future. The only constant at present is the uncertainty of both business and consumers,” Schüssler said.

 

According to June’s BETI, the number of transactions grew by 6.7 percent on year-on-year basis and this together with May’s strong growth of 9.3 percent in the same period would usually be a good sign for the country’s economic growth. However, the average value per transaction in nominal terms declined by 1.6 percent after posting a 1.1 percent decline on a year-on-year basis and for the first time since 2012, the average nominal value per transaction declined for three consecutive months in a row.

 

“The number of South African economic transactions have lowered, even as inflation remains over 5%. This could be due to the types of goods that are moving though the economy at present,” Schüssler added.



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