BankservAfrica’s Economic Transactions in March remains positive in the short-term

12 April 2017 | Economy | General | Dr Caroline Belrose, BankservAfrica

Dr Caroline Belrose, head of information services at BankservAfrica.

The recent uptick in the South African domestic economic activity is reflected in the latest BankservAfrica Economic Transaction Index (BETI) where March was the third consecutive month of real gains after taking inflation into account.

The monthly BETI improved by 0.7% in March, indicating the economy is in recovery mode. Although this was a slower increase than that between February and January, the real increases for three consecutive months so far in 2017 are a positive sign for the South African economy.

On a quarterly basis, the BETI improved by 2.7% - the strongest quarterly growth since April 2016, and adds to the growing sentiment that the South African economy is building up steam. Additionally, the speed of this recovery from the very weak fourth quarter suggests the first quarter of 2017 experienced good GDP growth.

On a year-on-year basis, the March BETI was still negative at 1.4% lower. However, since reaching its lowest level for more than two years in December 2016, the index has recovered back to levels of seven months ago.

The growth in car sales and the Purchasing Managers Index at above 50 basis points in March are positive for the economy. Added to these, is the recent SARS announcement that tax collections rebounded in March off a lower base in February.

The green shoots are just starting to grow, however it’s unclear how recent political and economic developments in South Africa may change this.

The number of transactions

The total number of transactions was 7.5% higher than March 2016 although the value of transactions was up by only 2.4% in nominal terms. The standardised BETI for the month was R799.4 billion and there were 94.5 million transactions in total.

Graph 1: The BETI and the SARB coincident Indicator