The economy is in “recovery mode” and showing small but significant year-on-year growth, according to the latest BankservAfrica Economic Transaction Index (BETI).
The index, published on Wednesday (10 December), is regarded as a fast and accurate indicator of current economic activity tracking monthly financial transactions, which totaled R686 billion in November, up 5.2% on a year ago.
“This is R1 billion more than the previous record of December 2013, and probably indicates that the value of transactions in December 2014 – the festive month – is again going to break all records.”
The index indicated that the economy was in recovery mode, showing a small, but significant, growth of 0.8% year-on-year.
A further boost could come from another drop in the fuel price in December.
The statement quotes BankservAfrica head data analyst Caroline Belrose.
“The growth figure is not a high number, but it is the best year-on-year percentage change since February this year. Therefore, although an improvement of less than one percent in real terms is certainly not ideal, November at least confirms an ‘uptick’ trend.”
“The economic recovery is ongoing, but only time will tell to what extent Christmas spending can give the economy a boost,” she said.
However, the index sounds a cautionary note on the actual number of transactions.
“The actual number of transactions within the BETI does reflect an underlying problem, showing a decline of 2.3% over the year, while the nominal value increased by only 2.1% before standardisation.”
The decline perhaps indicated that while the economy was expanding, there were fewer people transacting. An alternative explanation was that people might be a little more cautious before transacting.
“This drop in the number of transactions should be watched carefully.”
Overall indications were that South Africa was growing, but that growth remained subdued, and the economy could be summarised as “fragile”.