BankservAfrica’s transactional results reflect stronger 2017 start

Dr Caroline Belrose, Head of Information Services at BankservAfrica.

Latest BETI findings show that although SA economy is ‘not out of the woods’, there is reason to be optimistic this year.

The flow of money through the financial system is beginning to show signs of an upturn according to BankservAfrica’s Economic Transaction Index data for December and January*, which improved on a month-to-month basis. However, the BETI adjusted in line with inflation, still reflects a decline on a year-on-year basis.

“The BETI reading for January 2017 was 124.4, the same as December 2016, showing no declines,” explains Dr Caroline Belrose, Head of Information Services at BankservAfrica. “Taking a closer look at the year-on-year changes, specifically for January, the BETI registered a -1% decline compared to the -0.3% experienced in January 2016.”

“At the start of 2016 the economy was in freefall, as was the BETI which tracks economic activity in near real-time via payment transactions in the banking system,” says Dr Belrose. The first months of 2016 in particular experienced the worst start since the same period in 2008. Last year was certainly a weak year for the South African economy.

Despite this annual downturn, the latest BETI month-on-month results suggest that 2017 is off to a better start than 2016.

The fact that there was no decline between January 2017 and December 2016 – unlike those experienced in the four months previously – provides reason to be somewhat optimistic about the economy in the months to come.

“Although it is too early to say whether the latest figures signal a change in trend, the improved rainfall in the northern parts of the country together with the recovering commodity prices, suggest that the primary economy’s prospects are faring better. This sentiment is augmented by other industry statistics, such as the January Manufacturing Purchasing Managers Index and new car sales,” explains Mike Schüssler, Chief Economist at Economists dotcoza.

Real-time transaction volumes up

Adding further impetus to the turnaround argument is the finding that the volume of BankservAfrica transactions increased by 5.8% on a year-on-year basis. According to Dr Belrose, this is the best growth experienced since May 2013. The nominal standardised BETI was up by 6.1% in January at R680 billion. As inflation cancels the nominal growth, there are signs that nominal growth is speeding up too.

Real-time transactions clearings were up 36% in nominal terms. This in all likelihood reflects the change in which people transact. “Real-time transactions are growing strongly in the South African payments system, albeit from a low base,” ends Schüssler.