Press release: For immediate release
Date: 8 July 2015
June’s positive numbers off-set previous poor month
‘The elimination of load shedding for a year could help the economy grow by nearly 3%’
Regardless of the impact of load shedding, weak commodity prices, labour action and the current depressed climate – all conspiring to create a level of uncertainty – June’s BankservAfrica Economic Transaction Index (BETI) highlights that the economy is adjusting to challenges.
The stronger April and June BETI performances indicate that the economy is growing, and these underlying growth trends are still strong, if held back by the factors mentioned above. The headline year-on-year growth for June is 2.3%. However, monthly figures are quite volatile right now, making the quarter on quarter growth figures of 0.4% more realistic at present.
The actual number of transactions also grew for the first time in two months, and is at 3.7% for June. This is the fastest growth since December. The standardised value of transactions was R709.6 billion - over the R700 billion mark for the first time, with the exception of December, which is a seasonally high turnover month.
“The topsy-turvy current climate of the economy continues, with the BETI showing its strongest year-on-year increase since August 2013,” says Mike Schüssler, Chief Economist at Economists dotcoza.
The BETI indicates a mercurial economic climate, but one that is seemingly growing.
“The quarterly changes increased by a whole percentage to 0.4%, up from May’s -0.5%,” explains Dr Caroline Belrose, Head of Fraud and Data Analytics at BankservAfrica. “This one percent increase shows the volatile nature of the current economic cycle. However, monthly variances are even more extreme with a month-on-month decline of nearly one percent between April and May, to an increase of 0.7% between May and June. This is a 1.6% swing to the positive which is very a strong change of direction, particularly considering that the effects of holidays and seasonality have been accounted for in these figures.” I
n comparison to the last two years, the overall performance in June is impressive, although in terms of the performance of the last decade, it may be considered average. Nevertheless, in the current depressed economic climate, this month of average growth stands out.
Should South Africa experience any further positive economic inputs, such as lower oil prices or stronger currency for example, the economy is likely to see much higher growth than the current 2%. Schüssler speculates that a 15% drop in the oil price along with a Rand that stays closer to R12 than R12.60 to the dollar would help South African growth to approach 2.5%. “The elimination of load shedding for a year could also help the economy grow by nearly three percent,” he adds.
Contact Wendy Fourie for more information: email@example.com or (011) 497 4119.
Notes to the Editor
: The BETI stands for the BankservAfrica Economic Transaction Index. BankservAfrica is a payment enabling organisation operating between the various South African banks with a very secure messaging environment in place. Economists dotcoza is an economic consultancy that helped develop the BETI.
The BETI is a very fast and broad overview of current economic trends over a broad 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.
The BETI is also the broadest of the “now-cast” indicators to come to the market, as it covers economic transactions across the whole economy. Very big distortive economic transactions do not form part of the BETI. This is also on its own a trend-strengthening indicative factor.
BankservAfrica is a payment enabling organisation which sits between the various South African banks. The organisation has a very secure messaging environment in place.
Economists dotcoza is an economic consultancy that helped develop the BETI.