{"id":743029,"date":"2024-01-17T13:30:00","date_gmt":"2024-01-17T11:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=743029"},"modified":"2024-01-17T13:31:43","modified_gmt":"2024-01-17T11:31:43","slug":"south-africa-recession-talk-rears-its-ugly-head","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/743029\/south-africa-recession-talk-rears-its-ugly-head\/","title":{"rendered":"South Africa recession talk rears its ugly head"},"content":{"rendered":"\n

Economic activity saw a slight uptick at the end of 2023, but there are warning signs that the country dipped into a technical recession. <\/p>\n\n\n\n

The BankservAfrica Economic Transactions Index (BETI) improved slightly in December 2023 after two weak months, primarily driven by lower stages of load shedding and further fuel price cuts. <\/p>\n\n\n\n

\u201cThe monthly BETI increased by 1.9% to reach an index level of 133.0 in December,\u201d said Shergeran Naidoo, BankservAfrica\u2019s Head of Stakeholder Engagements. <\/p>\n\n\n\n

\u201cOn a year-on-year basis, the BETI was only 0.6% above the recorded level.\u201d<\/p>\n\n\n\n

The average BETI in 2023 was also down 0.5% compared to the 2022 average. <\/p>\n\n\n

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\u201cDuring the first half of 2023, economic activity surprised to the upside \u2013 but disappointed in the final months when these gains reversed,\u201d said Elize Kruger, Independent Economist. <\/p>\n\n\n\n

“Many headwinds plagued the economy during the year, not least the record levels of load shedding, elevated interest rates, a lacklustre job market and low confidence levels among households and businesses.”<\/p>\n\n\n\n

“The economic narrative has remained largely underwhelming, and despite several industries having become more resilient against load shedding and other challenges, the economy struggled to gain sustainable momentum.\u201d<\/p>\n\n\n\n

As the BETI is expressed in real terms, the renewed upward trend in inflation indicators in September and October hurt the BETI outcomes. <\/p>\n\n\n\n

That said, the deflator used in the BETI started moderating, with the forecast declining from 5.6% in November to 5.4% in December. <\/p>\n\n\n\n

With further food price moderation, lower global inflation, a stable or stronger rand and stable international oil prices, headline CPI in 2024 is forecasted to average 5.2% in 2024 (2023 estimate: 6.0%). <\/p>\n\n\n\n

Other nowcast indicators also signalled muted economic activity in December, such as the S&P Global South Africa Purchasing Managers\u2019 Index (PMI) falling from 50.0 in November to 49.0 in December amidst the nation’s port woes. <\/p>\n\n\n\n

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Businesses sound the alarm on a load shedding-sized problem<\/a><\/blockquote>