BankservAfrica – BETI April 2020

 

 

 

Press release: For immediate release

Date: 13 May 2020

 

All-time low for economic transactions in April – BETI

 

The BankservAfrica Economic Transaction Index (BETI) for April 2020 recorded the biggest decline in its history across monthly, quarterly and annual levels.

“The annual rate of decline was 13.9% in April and on a quarterly basis, this was -15.2%,” says Shergeran Naidoo, Head of Stakeholder Engagement: BankservAfrica. “Between April and March, the BETI dropped by 12.3% – the biggest monthly decline on record.”

The BETI is the quickest and broadest monthly indicator of economic activity in the local South African economy. With data going back to January 2002, the BETI is an insightful tool that captures interbank electronic payment transactions under R5 million to provide almost immediate feedback on the economic performance of most sectors.

“The South African economy shrank at the fastest rate on record in April while March also recorded a significant decline. The latest data provides a clear and broad indication of an economic collapse due to the coronavirus pandemic and the subsequent nationwide lockdown,” says Mike Schüssler, Chief Economist at economists.co.za.

The fall is also evident in the volume and value of transactions. “The annual actual volume of transactions fell by 16.4% in April,” says Naidoo. The standardised nominal value of transactions, recorded by the BETI, declined in nominal value to R709.2 billion.

“Consider for a moment that the actual real value of transactions in the BETI for April was at a level lower than at any time since February 2006.  This means the actual value of transactions was the lowest in 14 years,” says Schüssler.  “May numbers will likely be similar, which means the SA economy will have lost the advances it has made over the last 14 years.”

Parts of the economy will pick up again after the crisis is over and the BETI will reflect that. However, at present, the economy is doing the same real value of ‘turnover’ that it did 14 years ago. “The disappearing economic transactions in the crisis reflect the massive underlying economic damage the crisis has created,” says Schüssler.

This collapse is evident throughout all sectors of the economy as economic role players cannot transact with one another as they did before the crisis hit.

 

Ends

Contact Leigh-Anne Sa Joe for more information: Leigh-AnneS@Bankservafrica.com or (011) 497 4347.

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.co.za 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.

About BankservAfrica

BankservAfrica is the trusted payments partner and Financial Markets Infrastructure (FMI) to the financial services industry. As the largest automated payments clearing house in Africa we clear and process billions of low value card, ATM and EFT transactions annually. Our role in the South African National Payments System (NPS) is to facilitate interoperability between the banks and ensure regulatory compliance with our regulators against international banking security best practice and standards and reduces risk and complexity in the industry.

We continue to strive to be a world-class and pre-eminent payments operator, innovator and payments partner of choice in Africa, by simplifying our worlds through combining trusted transactions with sensitive information.

BankservAfrica’s national responsibility is to provide safe financial payment services for 56.7 million South Africans, irrespective of their location in partnership with our shareholders and partners.

With a 47-year history in South Africa, BankservAfrica operates 24/7, 365 days a year and delivers on very strong SLAs.

 

 

 

 

 

April 2020 BETI report to accompany press release

Date: 13 May 2020

The BETI displays the depth of the economic crisis

April’s economic transactions lowest on record due to coronavirus pandemic and subsequent nationwide lockdown

The BankservAfrica Economic Transaction Index (BETI) for April 2020 recorded its biggest decline on record across all three measurement periods.

The annual rate of decline was 13.9% while the quarter-on-quarter decline was 15.2%. The decline over the last month in March is also the biggest on record at 12.3%.

The BETI is the quickest and broadest monthly indicator of economic activity in the local South African economy. With data going back to January 2002’s figures, the BETI is an insightful tool that captures interbank electronic transactions under R5 million to provide almost immediate feedback on the economic performance of most sectors.

The South African economy shrank at the fastest rate on record in April while March also recorded a decline. The latest data provide a clear and broad indication of an economic collapse due to the coronavirus pandemic and the subsequent nationwide lockdown.

Consider for a moment that the actual real value of transactions in the BETI for April was at a level lower than at any time since February 2006.  This means the actual value of transactions was the lowest in 14 years. May numbers will likely be similar, which means the SA economy will have lost the advances it has made in  the previous 14 years.

Of course, parts of the economy will pick up again after the crisis is over and the BETI will reflect that. However, at present, the economy is doing the same real value of ‘turnover’ that it did 14 years ago. The disappearing economic transactions in the crisis reflect the massive underlying economic damage the crisis has created.

This collapse is being transmitted all through the economy as economic role players cannot transact with one another, many fearing the current crisis facing the world.

The actual volume of transactions fell by 16.4% in April on a year-on-year basis. The standardised nominal value of transactions as recorded by the BETI was R709.2 billion.

BETI April 2020 - Graph 1 The BETI and Co-incident Indicator percentage change on a year-on-year basis

 

BankServAfrica BETI April 2020 - Table 1 The BankservAfrica Economic Transaction Index

 

BankServAfrica BETI April 2020 - Table 2 The standardised value and number of transactions

 

 

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