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Recent data from BankservAfrica shows positive growth for economic transactions in December 2022, despite the broader economic reality being far bleaker.
With more people buying and selling, for the first time since six months of consecutive declines, BankservAfrica’s Economic Transactions Index (BETI) for December showed an index increase of 132.1 – almost on par with January 2022 at 132.8.
BankservAfrica’s head of stakeholder engagements, Shergeran Naidoo, said that on an annual basis, the BETI increased by 1.7% versus a revised decline of 0.9% in November.
“The monthly, quarterly and annual improvements all signal some improvement in the broader economy,” said BankservAfrica.
“The welcomed improvement to the BETI occurred against the broader economic context that has remained fairly grim during December, with load shedding continuing, interest rates and inflation remaining at elevated levels and the global economic slowdown gaining momentum,” said independent economist Elize Kruger.
The latest movement in the BETI reflects the South African economy’s resilience and the annual festive season spending that contributed to the number of electronic transactions pushing to an all-time high of 143.6 million, an 11.4% year-on-year increase and 2.7% up every month.
This is seen as a reflection of the strength of the South African economy and an uptick in spending during the festive season, the group said.
According to Naidoo, the standardised nominal value of transactions cleared through BankservAfrica was R1.3 trillion in December.
The Absa Purchasing Managers’ Index mirrored the same positive trend, which increased from 52.6 in November to 53.1 in December – ending the tricky financial year at the highest level in seven months for the manufacturing sector.
Despite this, the S&P Global South Africa PMI, which reflects activity in the broader private sector, slipped to 50.2 in December after the 50.6 tracked in November. Vehicle sales moderated somewhat in December, though as a seasonal phenomenon.
BankservAfrica said that, globally, the latest J.P. Morgan Global Composite Output Index highlighted how the global economy declined for the fifth successive month in December.
Overall, 2022 was characterised by an economic scenario of ‘muddle-along-little-thriving’ as multiple headwinds plagued the economy.
“The BETI ending December slightly below the January 2022 index level confirms this reality,” added Kruger.
“While the improvement in the BETI for December is encouraging, there are indications that we could expect ‘more of the same’ in 2023, as the main challenges of load shedding and households under pressure from elevated inflation and interest rates are likely to remain.”
The financial services company said that all indications also point to a less supportive global environment as the International Monetary Fund recently warned that a third of the global economy could be in a recession this year, adding to the risks for the South African economy from an export and commodity price perspective.
Consumer inflation is, however, expected to decrease, providing relief for many South Africans, according to BankservAfrica.
Read: Rand in limbo as grim reality for South Africa sets in