Despite the improvement of interbank services company BankservAfrica Economic Transactions Index (BETI) in January to 132.7, after six months of declines were broken by the increase in December, economic woes prevail, the company says.

“The BETI improved to an index level of 132.7 in January, showing a monthly increase of 0.4% and 0.3% year-on-year growth, though significantly lower than the all-time high of 143.5 in May 2022,” says BankservAfrica head of stakeholder engagements Shergeran Naidoo.

Although the BETI’s improvement across all measurement periods signals some tentative improvement in the broader economy, it remains only a blip.

“January has continued fairly grim, with loadshedding continuing unabated, interest rates rising and inflation remaining at elevated levels. The impact of the global economic slowdown is also still dominantly present,” notes independent economist Elize Kruger.

Further casting a shadow on January’s improvement is the recent wave of downward revisions to economic growth forecasts for South Africa. The South African Reserve Bank recently revised its forecast down to 0.3% for 2023 from 1.1% in 2022.

With average population growth running closer to 1.3% a year, these growth rates imply that, on a per capita basis, the average South African citizen will become poorer in 2023, she states.

“While the improvement in the BETI is encouraging, stormy clouds are gathering with many indications showing we could expect more of the same in 2023, as the main challenges prevail,” Kruger adds.

There is no indication that loadshedding will abate anytime soon, and households will remain under pressure owing to elevated inflation levels, interest rates and a tight labour market environment.

“Thus, just as 2022 was characterised by an economic scenario of ‘muddle-along, little-thriving’, given all the multiple headwinds plaguing the economy one month in, we can expect to experience more of the same in 2023,” she said.

The standardised nominal value of transactions cleared through BankservAfrica in January was R1.04-trillion compared to R1.3-trillion in December 2022, while the number of transactions fell from an all-time high of 143.6-million in December to 135.7-million in January 2023.

Meanwhile, strong growth in the number of debit transactions, up 16.6% year-on-year, and credit transactions, up 19% year-on-year, was recorded in January 2023, reflecting the robust growth trend in the volume of electronic payments, particularly in the DebiCheck category and Real-Time Clearing payment streams, with DebiCheck up 58.9% year-on-year, and Real-Time Clearing up 54.3% year-on-year.

Additionally, like the BETI, other nowcast indicators held up reasonably well in January, except for the S&P Global South Africa Purchasing Managers Index (PMI), which shows business activity contracted to 48.7 points in January, registering below the 50-point mark for the first time in three months. The Absa Purchasing Managers’ Index (PMI) moved sideways at 53.0 in January 2023 vs 53.1 in December, and the pace of vehicle sales growth moderated somewhat in January but remains 4.8% higher compared to a year earlier.

Globally, the latest JP Morgan Global Composite PMI recorded a second successive monthly rise that has helped to allay concerns of a worldwide recession, at 49.8 in January 2023, up from 48.2 in December, and signalled the smallest drop in output observed over the past six months, Kruger notes.