WHILE South Africa’s economic transactions for last month climbed by 6.2 percent, this did not necessarily translate into economic growth for the country, according to the BankservAfrica Economic Transactions Index (Beti).
According to the payment enabling organisation, the Beti continued to reflect the weakness in the underlying economy.
Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements, said the Beti increased by 6.2 percent year-on-year in January.
“Although this is a good, strong start to the economic year, this growth must be considered against the low base in January 2021 when the Beti experienced its worst decline of -1.2 percent,” Naidoo said.
In December 2020 and January 2021, when the country was placed under stricter lockdown levels during the Covid-19 second wave, non-essential establishments that included restaurants and entertainment places closed earlier under the strict curfew. Alcohol sales were prohibited at shops and bars while borders were closed, restricting movement and travel. Load shedding in January 2021 also impacted the base for which the January 2022 Beti was measured.
Naidoo said that on a monthly basis the Beti declined by 0.2 percent and reflected a flattish quarter-on-quarter change of 0.1 percent.
“Supporting these is the Beti Index of 126 points, which was the lowest in three months.”
The total amount of transactions recorded for January at 114 988 683 was the lowest in nine months. The standardised nominal value of transactions was R960.8 billion, which was 15.7 percent higher than January 2021 due to higher inflation.
The inflation, as measured by the CPI (excluding Homeowner equivalent rent and PPI) was now far higher than it was in nearly five years. The deflator was estimated to be 8 percent higher on a year-on-year basis for last month.
January’s Beti were held back by the lack of foreign tourism. As a result, the monthly figures contrasted the robust increases reported for local tourism and car sales.
Economists.co.za chief economist Mike Schüssler said the electricity interruption, moreover, had slowed the economy.
“South Africa is not getting the full benefit of high commodity prices, and the infrastructure cable theft has meant that coal and iron ore are not exporting to their potential,” Schüssler said.
The Beti, which boasts a close correlation to the South African economy’s gross domestic product (GDP) figures, suggested South Africa’s 2022 first quarter growth to be somewhat lower. More imminently, the 2021 fourth-quarter growth could also be far lower than the first two quarters of 2021.
“The low growth recorded in the fourth-quarter 2021 GDP has resulted in a slower start for 2022 than 2021 had,” Schüssler said. Growth of about 2 percent for 2022 was more likely than 3 percent or more.
BankservAfrica said that hope was on the horizon with South Africa now being in lockdown level 1, creating the possibility of the economy reopening further.
PwC, in its South Africa Economic Outlook for 2022, said the country’s consumers were facing myriad challenges at the start of 2022. It said these included job losses in 2021, bringing employment back down to the numbers seen in lockdown level 5.
It said South Africans, at the same time, were experiencing an increase in inflation, with the petrol price recently breaking the R20/litre level.
According to the firm, this will only support the South African Reserve Bank in raising interest rates substantially during 2022.
BUSINESS REPORT ONLINE