The BankservAfrica Economic Transactions Index (BETI) ended the year positively, despite the ongoing, dismal economic context, and it signals an improvement in the economy.
“After six consecutive months of declines, the BETI rose to an index level of 132.1 in December, almost on par with the January 2022 level of 132.8,” BankservAfrica head of stakeholder engagement Shergeran Naidoo said in a statement.
Naidoo said however “there are indications that we could expect ‘more of the same’ in 2023,” as the main challenges of load shedding and households under pressure from elevated inflation and interest rates are likely to remain.
The BETI increased by 1.7% on an annual basis versus a 0.9% decline in November.
“The monthly, quarterly and annual improvements all signal some improvement in the broader economy,” said Naidoo.
This was against an economic context that had remained “fairly grim” during December, with load shedding continuing, interest rates and inflation remaining at elevated levels and the global economic slowdown gaining momentum, said independent economist Elize Kruger.
She said the same positive trend was mirrored in the Absa Purchasing Managers’ Index (PMI), which increased to 53.1 in December from 52.6 in November, ending the difficult year for the manufacturing sector at the highest level in seven months.
The S&P Global South Africa PMI, which reflects activity in the broader private sector, slipped to 50.2 in December after the 50.6 tracked in November.
The latest JP Morgan Global Composite Output Index highlighted how the global economy declined for the fifth successive month in December.
“Overall, 2022 was characterised by an economic scenario of ‘muddle-along-little-thriving’ as multiple headwinds plagued the economy. The BETI ending December slightly below the January 2022 index level confirms this reality,” said Kruger.
A resilient economy and the annual festive season spend contributed to the highest number ever of electronic transactions of 143.6 million during the month, an 11.4% year-on-year increase and 2.7% up on a monthly basis.
Naidoo said the global environment was expected to be less supportive as the International Monetary Fund recently warned that a third of the global economy could be in a recession this year, adding to the risks for the South African economy from an export and commodity price perspective.
“One silver lining is the expectation that consumer inflation should moderate and provide some relief for many South Africans,” he said.
The BETI reflects the standardised value of all economic transactions in the South Africa economy at seasonally adjusted real constant prices.
BUSINESS REPORT