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CAPE TOWN- For the first time in ten months, economic transactional activity in South Africa picked up in real terms on a year-on-year basis in July due to weaker inflation, according to the latest BankservAfrica Economic Transactions Index (BEIT). 

However, the index reflected slow growth on the quarterly and monthly basis.

As measured by BankservAfrica's national payment system, the monthly transactional activity for July showed a 0.6% year-on-year increase in the actual value of transactions.

Chief Economist at Economists dotcoza, Mike Schüssler said: "This change is the result of a very weak July 2016 which saw the transaction values fall out of the current annual numbers. Therefore, the annual increase is a 'base effect' that lifts the actual index numbers above last year's lows."

The quarterly numbers being negative is due to the very low May 2017 BETI numbers, and follows from the sovereign credit rate downgrades for South Africa by the global ratings agencies.

Between the months, June and July, the BETI declined by 0.2%, this is minor when compared to other monthly declines since 2015.

The number if transactions increased by 6.7% on a year-on-year basis in July but the average value per transaction declined by 1.3% on a year-on-year basis. The standardised value of transactions for July was R789.2 billion, which is a 5.4% year-on-year upturn.

Within the last 43 month, 21 of the monthly changes in the BETI have been declines and one month had no change, while the other 21 months showed increases.

According to Schüssler, these are all indicative of a flat economy.

"There is hope that further interest rate reductions will boost consumer confidence and a better understanding of the economic situation by policymakers will help the South African economy," Schüssler concluded.