Author: Mike Schussler Source: BankServAfrica
Press release: for immediate dissemination
13 June 2013
BETI comes close to confirming economic upturn
The negative sentiment in the South African economy may not be completely justified, as South Africa’s prime now-casting index, the BankservAfrica Economic Transaction Index (BETI), is revealing resilience in an economy hard at work to bounce back.
While the BETI figures for May are not as strong as those for April, they still reveal year-on-year growth of 2.9% compared to the same time in 2012. Although the actual index number for the May BETI is a little down on April, it is the second highest on record. This confirms that economic activity may have turned the corner after about three quarters of stagnation.
“The BETI was the first South African economic time series to point to much slower growth in the South African economy. It is now also among the first to point to at least a small pickup in the economic growth rate,” says Brad Gillis, CEO for regulated products at BankservAfrica.
The monthly change between April and May was a -0.2% decline and according to Mike Schüssler, chief economist with Economists.co.za, April was the strongest month in a long time as the shift in public holidays made it a stronger-than-normal month. “March had a public holiday and school holidays that it normally does not have and was therefore weaker than it should have been,” he explains.
“On the other hand, the May BETI seems more subdued but it is clear that April was an exceptionally strong month, which, together with February transaction data, indicated a return to stronger growth in the economy.”
The actual May BETI does therefore confirm that South Africa is very likely to have higher economic growth in the second quarter of 2013 than the first quarter.
What this means for the economy
Schüssler says South-Africa’s average growth rate over the last 62 years has been 3.4%.
“We saw no major strikes in May, and that has definitely played a role in relatively strong figures. The economy is still on its feet, but the pace is closer to a stroll than that of a 100m race. A weaker Rand will support exports as well as protect local factories and services against imports. Tourism is increasing in spite of tough times.”
“I expect growth of around 3% in the second quarter, which is average compared to the historical figure. Annual growth for 2013 will be lower due to the poor performance in the first quarter. The real question is if we can keep growth above 2.5% for the rest of the year,” he says.
“The South African economy has climbed back from stagnation levels that many still think the economy is in. Stagnation was last year’s battle. Despite the weaker Rand and weak economic data in March, we are convinced that economic activity is picking up - albeit only slightly.”
Interesting facts and impressive numbers incorporated into the BETI
• The actual number of economic transactions in the May BETI was 81,7 million, which was 3.5% higher than during May 2012. More importantly is the fact that the actual total monetary value of the transactions that the BETI reflects is over R634,2 billion just for the month of May 2013. The total value of transactions in May 2012 is therefore up nearly 12% (11.8%) in nominal terms over May 2012.
• Over the last year to May, the actual number of economic transactions included in the BETI was 1,1 billion. This number does not reflect transactions such as salary and card transactions. The actual value of transactions was R8,2 trillion. This represents around 30% of the turnover of the South African economy.
• South Africa is one of the few countries in the world to have one regulated payment system which enables the country to measure economic transactions as an economic indicator, and BankservAfrica plays host to this process. The BETI is built on data generated by BankservAfrica.
Contact Gerian Miller for more information: GerianM@bankservafrica.com or (011) 497 4067
Notes to the editor:
BankservAfrica is South Africa’s largest automated clearing house, providing interbank settling and clearing. economists.co.za is an economic consultancy that helped develop the BETI and provides analysis of the BETI.
The BETI is a very fast and broad overview of current economic trends over a wide range of sectors, making use of economic transactions as captured by BankservAfrica. Like the Swift Index, the BETI is considered a “now-cast” number as a result of its speedy ability to convey the overall economic conditions to the market. Where most economic indicators can take anything between 38 and 76 days to become public knowledge, now-cast indicators take less than a month after the facts were revealed to come to the market.