Economic transactions declined significantly in July, recording a real
value fall of -0.2% on a year-on-year basis, according to the latest
BankservAfrica Economic Transaction Index (BETI) – a measure of all
South African interbank transactions under R5 million. This was also
the most significant fall on every measure and for all usual periods
for the BETI.
"The quarterly and monthly levels also declined by -3% and -1.2%
respectively. July seems to have been a particularly weak month with
economic transactional activity closely aligned with January and May's
low figures," says Dr Caroline Belrose, Head of Fraud and Data
Analytics at BankservAfrica.
The BETI data reveals that the quarterly drop is the biggest decline
in 18 months, indicating that SA's economic activity is dramatically
slowing again. "This data shows there is a broader slowdown amongst
all of the country's main economic sectors at present," says Mike
Schüssler, Chief Economist at Economists dotcoza.
He explains that while GDP showed that the large drop in mining caused
the economic decline in the first quarter, the BETI now indicates a
broader economic slowdown in the third quarter after a more positive
second quarter.
Electronic credit transfers via electronic funds transfer (EFT) did
not show any nominal growth at all, while normal debit orders were
down, indicating a long-term decline in credit growth.
"The higher interest rates and slow economic growth is slowing
consumer spending which will, in all likelihood, continue in the
short-term," says Schüssler.
Only real time via electronic clearing showed a meaningful increase.
However, this could be the result of the general shift away from
cheque-based transactions.
In line with July's data, the volume of transactions going through the
payment system via BankservAfrica declined by -1.2%, according to Dr
Belrose. The total nominal value before standardisation also showed a
decline. The standardised value of the BETI was R749 billion.
While the second quarter gross domestic product (GDP) growth is likely
to be far more positive than the negative first quarter figures, the
data suggests that the economy is off to a bad start with low levels
of transactions likely to continue into the third quarter.
"July was certainly a very weak month. While the South African economy
may have shown a glimmer of hope, there is still cause for concern,"
concludes Schüssler.
