Latest news with #BankservAfricaEconomicTransactionsIndex
The Citizen
3 days ago
- Business
- The Citizen
Economic activity slowly improving although economic pressure persists
Economic activity increased for a third month in July, showing the resilience of South Africa's economy despite the risks. Economic activity in South Africa is slowly improving although economic pressure, specifically the US tariffs, persists, weighing on business confidence and investor sentiment. According to the BankservAfrica Economic Transactions Index (BETI), which tracks the value of all electronic transactions cleared through BankservAfrica at seasonally adjusted real prices, South Africa's underlying economic resilience continues to be reflected amid prevailing risks and financial strain. 'The BETI increased for the third consecutive month to reach an index level of 139.3 in July 2025, which was 0.2% up on June's level,' Shergeran Naidoo, BankservAfrica's head of stakeholder engagements, says. The BETI is also up 1.9% year-on-year, signalling that the second quarter uptick in economic activity is extending into the third quarter, although the momentum is slightly moderated, Elize Kruger, an independent economist, says. 'The economy continues to demonstrate resilience, although significant challenges and risks persist. In particular, uncertainty around the impact of US import tariffs on South Africa as well as the global economy, weighs on business confidence and investment sentiment, posing a potential downside risk to growth forecasts. ALSO READ: Does stronger economic activity indicate improved GDP? Corporate excellence and diversity in economy 'While several other economies secured more favourable US import tariffs than initially announced, South Africa's non-commodity exports remain subject to a 30% tariff from 8 August while negotiations appear to be continuing.' Despite the ongoing challenges and uncertainties, Kruger points out that the economy's resilience, as reflected in the improved BETI over the past three months, is testament to corporate excellence, diversity in the economy and the power of tailwinds currently at play. 'Management teams in corporate South Africa have stood the test of times, steering companies through the troubled waters of political transition, crisis periods like Covid and operating in an environment crippled by load shedding. 'There is no doubt South African companies will rise to the challenge posed by higher US tariffs, working to mitigate the impact through strategic adjustments, supported by government initiatives — even as negotiations continue.' ALSO READ: Economic activity picked up for the first time in 8 months in May Structural tailwinds will protect economic activity She says local structural tailwinds continue to cushion the economy against global pressures. Inflation remains well-contained, with headline inflation at 3% in June, the bottom of the South African Reserve Bank's (Sarb) 3–6% target band, with the 2025 average forecast tracking at around 3.5%. 'The favourable inflation environment created scope for the Sarb to cut interest rates at its last Monetary Policy Committee (MPC) meeting, alleviating some pressure on households and corporates. 'In addition, another perk of the low inflation environment is the key role it plays in supporting the recovery of salary earners' buying power. With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real increases in salaries, which should support consumer spending.' Kruger also points out that the real GDP growth forecast for 2025 stabilised at around 1.0% compared to 0.6% in 2024. However, she says, this growth rate remains below population growth, highlighting ongoing pressure for South Africans. ALSO READ: Economic activity slows in April as economy struggles Data on economic activity also looks good The number of transactions cleared through BankservAfrica reached an all-time high of 177.5 million in July, according to Naidoo, surpassing the previous record high of 176.3 million registered in May 2025, up by 8.9% on a year ago. The standardised nominal value of transactions moderated slightly to R1.338 trillion in July compared to R1.361 trillion in June 2025. All electronic payment streams recorded higher value for transactions during July, except DebiCheck. All other timeous economic indicators posted stronger readings in July, Naidoo points out. Naamsa revealed that the strong performance of the vehicle sales market continued robustly in July 2025. Total vehicle sales showed an improvement of 15.6% in July, with year-to-date sales up by 13.9%, while new car sales in July grew by a notable 20.1% and year-to-date were a notable 21.1% ahead. The S&P Global South Africa Purchasing Managers' Index (PMI) remained in expansionary territory with an index level of 50.3 in July, slightly up on the 50.1 in June. Encouragingly, Naidoo says, after eighth consecutive months in contractionary territory, the seasonally adjusted Absa Purchasing Managers' Index, a reflection of the prospects in the manufacturing sector, also increased to 50.8 index points in July compared to 48.5 in June, the first expansion signal since October 2024. 'The improvement in economic activity during July appears to have been broad-based, with gains observed across multiple sectors. This is a positive signal for underlying economic momentum and resilience,' Kruger says.
IOL News
16-07-2025
- Business
- IOL News
June BETI improvement signals economic recovery in South Africa
The index, which measures the value of electronic transactions processed through BankservAfrica on a monthly basis at seasonally adjusted real prices, increased by 0.4% in terms of monthly growth in June to an index level of 139.1, a second month of recovery. BankservAfrica is South Africa's biggest automated payments clearinghouse. Image: Simphiwe Mbokazi Independent Newspapers The BankservAfrica Economic Transactions Index (BETI) improved for a second consecutive month in June, indicating a more optimistic outlook for economic performance in the second quarter. The index, which measures the value of all electronic transactions cleared through BankservAfrica's automated clearinghouse on a monthly basis, increased in June to an index level of 139.1, representing a 0.4% monthly growth and a second month of recovery. Shergeran Naidoo, BankservAfrica Head of Stakeholder Engagements, said the improved BETI signals a positive shift in overall economic activity in the second quarter, which could also be reflected in a favourable GDP outcome set to be published by Stats SA in early September. 'The uptick in the BETI in June is welcomed, especially given that the economy started 2023 on the back foot, with quarterly growth of only 0.1% in the first quarter on a seasonally adjusted basis, and confidence indicators declining across the board,' said Independent Economist Elize Kruger. 'While several sectors entered a technical recession in the first quarter, recent indicators suggest a rebound in mining and manufacturing, with both sectors likely returning to growth in the second quarter,' said Kruger. Overall, second quarter GDP growth is forecast at 0.6% quarter-on-quarter, seasonally adjusted, compared to 0.1% in the first quarter. The upward trend is in line with the BETI indications for the second quarter. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Kruger said even though some sectors had remained resilient, others were still struggling amid ongoing challenges and notable risks. 'The renewed uncertainty about the impact of US import tariffs, not only in South Africa but across the globe, does not bode well for confidence and investments, and will increase the downside risk to growth forecasts in 2023 and beyond,' she said. Looking ahead, she said that although South African exports were expected to come under pressure from higher US import tariffs, the elevated gold price and lower international oil prices could soften some of the impact. 'Furthermore, a considerable share of South African export commodities has been exempted from the announced US import tariffs, which could provide a buffer for the mining industry and subsequently provide some support for the economy,' she said .The BETI's recovery is also reflected in other economic indicators. National Association of Automobile Manufacturers of South Africa data revealed that total vehicle sales improved by 18.7% year-on-year in June, with year-to-date sales up 13.6% compared to a year earlier, while new car sales in June grew by a notable 21.7% y/y and year-to-date were 21.3% ahead. The S&P Global South Africa Purchasing Managers' Index has also remained in expansionary territory with an index level of 50.1, although it was down from 50.8 in May. On the other hand, the Absa Purchasing Managers' Index, reflecting on prospects in the manufacturing sector, remained in contractionary territory for an 8th consecutive month at 48.5 index points, but up from 43.1 index points in May. After reaching an all-time high of 176.3 million in May 2023, the number of transactions cleared through BankservAfrica moderated somewhat in June to reach 167.3 million, but it was still 13.5% up on a year ago, said Naidoo. A tailwind that should continue to buffer the economy against global headwinds includes headline inflation that remains below the South African Reserve Bank's 3-6% target band at 2.8%, according to May's print. The average 2023 forecast is expected to be around 3.5%. The favourable inflation environment has created scope for further interest rate cuts. Visit:
The Citizen
16-07-2025
- Business
- The Citizen
Does stronger economic activity indicate improved GDP?
GDP growth for the second quarter is forecast at 0.6% compared to 0.1% the first quarter, in line with the BETI indications for the quarter. Stronger economic activity, as demonstrated by the increased number of electronic transactions in South Africa in June, can indicate an uptick in GDP for the second quarter after a disappointing first quarter. According to the BankservAfrica Economic Transactions Index (BETI), that measures the value of all electronic transactions cleared through BankservAfrica on a monthly basis at seasonally adjusted real prices, the BETI improved for the second consecutive month in June, indicating a more optimistic outlook for economic performance in the second quarter. 'The BETI increased in June to an index level of 139.1, representing growth of 0.4% in June and a second month of recovery,' Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, says. 'After months of choppiness, the improved BETI signals a positive shift in overall economic activity in the second quarter, which could also be reflected in a favourable gross domestic product (GDP) outcome when Statistics SA publishes it in early September. ALSO READ: Economic activity picked up for the first time in 8 months in May Welcome uptick in economic activity Elize Kruger, an independent economist, says the uptick in the BETI is welcome, especially given that the economy started 2025 on the backfoot, with quarterly growth of only 0.1% in the first quarter and confidence indicators declining across the board. 'While several sectors entered a technical recession in the first quarter, recent indicators suggest a rebound in mining and manufacturing, with both sectors likely returning to growth in the second quarter. 'While some sectors remained resilient, others are still struggling amid ongoing challenges and notable risks. The renewed uncertainty about the impact of US import tariffs, not only in South Africa but across the globe, does not bode well for confidence and investments and will increase the downside risk to growth forecasts in 2025 and beyond.' ALSO READ: Structural reform is silver bullet needed for SA economy to grow Although South African exports are expected to come under pressure from higher US import tariffs, the elevated gold price and significantly lower international oil prices could soften some of the impact, Kruger says. 'Furthermore, a considerable share of South African export commodities has been exempted from the announced US import tariffs, which could provide a buffer for the mining industry and subsequently provide some support for the economy.' Other economic data also shows continued recovery The BETI's continued recovery is also reflected in other timeous economic indicators. naamsa data revealed that total vehicle sales improved by 18.7% in June, with year-to-date sales up by 13.6% compared to a year earlier, while new car sales in June grew by a notable 21.7% y/y and year-to-date were a notable 21.3% ahead. The S&P Global South Africa Purchasing Managers' Index (PMI) remained in expansionary territory with an index level of 50.1, though down from 50.8 in May. Although the report noted 'mixed signals' from the underlying components, the average quarterly reading was higher than in the first quarter. On the other hand, Kruger says, the seasonally adjusted Absa Purchasing Managers' Index (PMI), reflecting on prospects in the manufacturing sector, remained in contractionary territory for an eighth consecutive month at 48.5 index points, but up from 43.1 index points in May. After reaching an all-time high of 176.3 million in May 2025, the number of transactions cleared through BankservAfrica moderated somewhat in June to reach 167.3 million, still 13.5% up on a year ago, Naidoo says. ALSO READ: Economic activity slows in April as economy struggles Value of economic transactions also increase The standardised nominal value of transactions also increased to R1.361 trillion in June compared to R1.351 trillion in May 2025, with the resultant average value per transaction covered in the BETI increasing to R7 747, compared to May's R7 618, showing a 1.7% monthly increase. Kruger says locally some structural tailwinds should also continue to buffer the economy against global headwinds. Headline inflation remains below the South African Reserve Bank (Sarb) 3-6% target band at 2.8%, according to May's print. 'The average 2025 forecast is expected to be around 3.5%. The favourable inflation environment created ample scope for the Sarb to cut interest rates. 'Carpe Diem Research Services forecasts a 25 basis points cut to be announced at the upcoming Monetary Policy Committee (MPC) meeting on 31 July. This will likely be the final cut in the current downward cycle.' She adds that the low inflation environment will aid the recovery of salary earners' purchasing power. 'With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real increases in salaries.'
The Citizen
11-06-2025
- Business
- The Citizen
Economic activity picked up for the first time in 8 months in May
It is good news, but there are still many risks that could bring the economic activity down again. Economic transactions picked up in May for the first time in eight months, bringing some relief after months of stagnation. A part of May's improvement stems from wiping out the weakness evident in the index in April. According to the BankservAfrica Economic Transactions Index (BETI), which measures the value of all electronic transactions cleared through BankservAfrica on a monthly basis at seasonally adjusted real prices, economic activity rebounded in May, although it is too early to tell if this positive trend will hold. Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, says the BETI improved to an index level of 138.3 in May, up from the 136.2 recorded in April, breaking an eight-month trend of sideways movement. Despite the shift, notable risks remain, and more evidence of sustained higher economic activity must be delivered before the narrative of a subdued growth environment can change. 'The number of transactions cleared through BankservAfrica in May reached an all-time high of 176.3 million compared to 167.9 million in April, surpassing the previous record of 172.4 million in March 2025.' ALSO READ: Economic activity in SA struggling to gain momentum Too early to call a change in the trend for economic activity Elize Kruger, an independent economist, says while the latest figure is encouraging, it is too early to call an imminent change in trend as the economic environment has not changed materially in May, and notable risks remain. 'In addition, the recovery in economic activity in May followed the month of April when the world was hit by the US announcement of punitive import tariffs, and subsequently an evolving trade war developed with a great deal of volatility from day to day as markets plummeted and global and local growth forecasts were slashed. 'Confidence levels across the globe and in South Africa were knocked by the sheer uncertainty that these developments brought. 'However, with some tariffs put on ice and several countries entering, more favourable trade agreements, averting a worst-case scenario. Markets responded with relief rallies and a cautious return of confidence, albeit from a low base.' However, she says, the BETI is still 1.4% higher, and the uptick remains encouraging as all of its components increased in value terms during May. 'The most notable performances were the heavily weighted EFT credits, Real Time Clearing and PayShap transactions. 'The standardised nominal value of transactions also increased to R1.351 trillion in May compared to R1.320 trillion in April, with the resultant average value per transaction covered in the BETI increasing to R7 618, higher than April's R7 485. 'All payment streams increased in both volume and value terms during May.' ALSO READ: Economic activity still moving sideways but optimism increases Two PMIs and new car sales also added to increased economic activity Kruger says two other timeous economic indicators also posted stronger readings. The S&P Global South Africa Purchasing Managers' Index increased to 50.8 in May, driven by the sharpest uplift in private sector output in four years. Naamsa also reported that the strong momentum in the local vehicle sales market continued into May 2025. Total vehicle sales increased by 22%, with year-to-date sales up by 12.6% compared to the same period a year earlier. New car sales surged by an impressive 30%, while year-to-date, sales were a notable 21.2% higher. On the other hand, she points out that the seasonally adjusted Absa Purchasing Managers' Index (PMI), reflecting on prospects in the manufacturing sector, remained in contractionary territory for a seventh consecutive month at 43.1 index points. 'Furthermore, the BETI rebound is a timely development, given that the economy started 2025 on the backfoot as seasonally adjusted quarterly growth of only 0.1% was registered in the first quarter with sectors such as mining, manufacturing and construction now in technical recession.' says Kruger. ALSO READ: Structural reform is silver bullet needed for SA economy to grow – OECD Economic growth adjusted downward, but inflation stays low While economic growth forecasts for 2025 have been revised downward, with the latest Reuters consensus among economists now projecting real gross domestic product (GDP) growth at 1.2%, down from 1.7% in January. Carpe Diem Research offers an even more cautious outlook, forecasting growth at just 1.0%. On the more positive side, Kruger says local inflation remains well under control, with headline inflation at 2.8% in April, below the target band of the South African Reserve Bank (SARB) of between 3-6%, with the average 2025 forecast around 3.4%. 'The favourable inflation environment created ample scope for the Sarb to cut interest rates. Even after a 25 basis points cut in May, the repo rate remains quite high at 7.25%, as real interest rates are still considered punitive for an economy muddling along, unable to gain meaningful momentum.' Kruger also points out that, helped by some weakness in the US dollar, the rand exchange rate recovered all of its losses after the US 'Liberation Day' announcements and trading at fairly strong levels. 'The low inflation rate will play a key role in supporting the recovery of salary earners' purchasing power. With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real increases in salaries, which should support consumer spending.'
The Citizen
14-05-2025
- Business
- The Citizen
Economic activity slows in April as economy struggles
Although the South African economy is muddling along, there is some hope thanks to low inflation, low fuel prices and a strong rand. Economic activity has slowed in April as the economy struggles with downside risks, such as the United States' (US) punitive import tariffs, plummeting markets and sharply lower forecasts for global economic growth. According to the BankservAfrica Economic Transactions Index (BETI), that measures the value of all electronic transactions cleared through BankservAfrica on a monthly basis at seasonally adjusted real prices, economic activity slipped in April. 'The BETI reached its lowest level of the year of 136.4 in April, down by 0.6% on the 137.2 recorded in March,' Shergeran Naidoo, BankservAfrica's head of stakeholder engagements, says. Although the BETI is still 1.5% higher than a year ago, the slowdown reflects the impact of April's announcement of U.S. punitive import tariffs, which marked the beginning of a developing trade war leading to daily volatility, plummeting markets and slashed global growth forecasts. Elize Kruger, an independent economist, says confidence levels across the globe and in South Africa have been knocked by the sheer uncertainty that these developments brought on. 'Low confidence and uncertainty are detrimental to economic activity, as investors and households hold back on spending decisions until there is more clarity.' ALSO READ: Economic activity in SA struggling to gain momentum Good news for local economy despite global setbacks However, despite global setbacks, positive factors are expected to support economic activity in 2025, she says. 'While the overall effect of global developments is negative for the South African economy, prompting a downward revision of 2025 growth forecasts by around 0.5 percentage points, several offsetting factors are offering some relief. 'The global downturn is expected to dampen commodity demand and prices, but lower international oil prices are easing inflation pressures, and rising gold prices may help counter export losses. Many South African export commodities also remain exempt from US tariffs, providing potential support for the mining sector and broader economy.' Kruger points out that other economic indicators were mixed in April, sending conflicting signals about the strength of the economy. The S&P Global South Africa Purchasing Managers' Index rose to 50.0 in April, increasing from 48.3 in March, after four months in negative territory. ALSO READ: SA's economic growth outlook growing increasingly dim Manufacturing is struggling, but car sales are recovering Meanwhile, the seasonally adjusted Absa Purchasing Managers' Index (PMI) remained in contractionary territory for a sixth consecutive month. Data from Statistics SA also recently confirmed that the manufacturing sector has entered a technical recession with two consecutive quarterly contractions. However, encouragingly, Naamsa figures revealed that the strong performance in the vehicle sales market continued in April 2025. 'All indicators point to the likelihood that, after several false starts, full-year vehicle sales in 2025 will finally return to pre-Covid levels, reflecting an improvement in household budgets due to lower inflation and interest rates,' Kruger says. ALSO READ: Increased unemployment rate red flag for weak economic growth Pockets of excellence in local economy will help economic activity 'With some pockets of excellence in the South African economy, such as in the renewable energy, automotive and financial sectors and positive developments relating to the de-escalation of the global trade war in recent days, such as the trade deals between the US and UK and China, the South African economy can regain momentum in the second half of the year.' Kruger says the launch of the second phase of Operation Vulindlela is also a positive development, confirming government's commitment to push forward on much-needed structural reforms. After reaching an all-time high in March, the number of transactions cleared through BankservAfrica in April 2025 subsided to 167.9 million compared to 172.4 million in March, but it was still 7% up on a year ago. The standardised nominal value of transactions eased off to R1.320 trillion in April compared to R1.365 trillion in March 2025, with the average value per transaction tracked in the BETI continuing on its downward trend to R7 482. ALSO READ: Trump tariffs created unprecedented uncertainty — trade expert Structural tailwinds will push up economic activity Kruger says some structural tailwinds should continue to push economic activity higher on the local front in 2025 despite global developments. With inflation currently at 2.7%, below the South African Reserve Bank (Sarb) 3-6% target band, there is significant room to cut interest rates from the current repo rate level of 7.5% by at least 50 basis points. 'Real interest rates are simply unnecessarily punitive for an economy muddling along, unable to gain meaningful momentum,' she says. At 4.3%, the average real repo rate remains highly restrictive, especially when compared to the neutral level of 2.7%. Meanwhile, the rand has regained nearly all its post-US Liberation Day losses, helped by some weakness in the US dollar and is trading at fairly strong levels, Kruger says. 'The low inflation rate will also play a key role in supporting the recovery of salary earners' purchasing power. With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real salary increases, which should boost consumer spending.'
