South African economy shows slow recovery

An economic index released on Thursday (13 September 2012) showed South Africa moving from stagnation to a slow recovery, Bankserv Africa said.

The monthly Bankserv Africa Economic Transaction Index (BETI) confirmed international trends towards slow growth.

“The BETI confirms the trend whereby a slow recovery seems to be the new normal across the globe,” said Bankserv Africa spokesman Brad Gillis.

The index provides close to real-time information on economic movements, based on banking transactions in South Africa.

In South Africa, the BETI showed a month-on-month recovery of 0.6 percent in the economy for August.

This was the first positive growth in four months.

The BETI also showed a relatively strong year-on-year improvement of 2.9 percent. The actual BETI was thus higher than in August, but clearly lower than the April to June levels, indicating a weak economic recovery.

Economist Mike Schussler said the positive news from the index would not translate into massive growth in the next few months.

“Rather, it is an indication of our economy fighting to get back on its feet,” he said.

“Year-on year and quarter-on-quarter, the numbers look good, but month-on-month it still shows a decline.”

This showed South Africa was recovering, but at a slow pace.

Schussler expected world growth indications to move lower for the next year, with indications that China’s economy was stalling.

China’s export growth had fallen below three percent, with manufacturing stagnant.

“The lower growth is perhaps good news in that jobs will be retained, but we should not expect significant growth in the labour market,” he said.

“We can count ourselves lucky that we have actually seen some jobs created in the first half of the year, despite very low economic growth.”

Low interest rates and a higher government deficit were likely.

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South African economy shows slow recovery