The South African economy is sort of taking two steps forward, one step back - actually not really going anywhere regarding real growth, Mike Schüssler, chief economist at Economists dotcoza, told Fin24 on Wednesday.
In looking at the latest BankservAfrica Economic Transaction Index (Beti) for June, Schüssler said, should SA experience any further positive economic inputs, such as lower oil prices or stronger currency for example, the economy is likely to see much higher growth than the current 2%.
He speculated that a 15% drop in the oil price along with a rand that stays closer to R12 than R12.60 to the dollar would help South Africa's growth to approach 2.5%. “The elimination of load shedding for a year could also help the economy grow by nearly 3%."
The Beti is actually showing its strongest year-on-year increase since August 2013.
"The big thing is, however, that we have had two surprisingly strong months in April and June, while May was bad, so our economy is just standing still in a sense," explained Schüssler.
"The stronger April and June Beti performances indicate that the economy is growing and these underlying growth trends are still strong."
He thinks the SA economy might end the year at close to 2% growth perhaps. The Beti indicates a mercurial economic climate, but one that is seemingly growing.
"So no one is really getting richer or poorer. If we could have the electricity problems sorted out, if Government could implement sensible rules about tourism visas and if the farm issues could be sorted out, the economy could easily go back to 4% growth," he said.
"However, I think with the power outages and visa issues we are shooting ourselves in the foot - so it is self-inflicted. I don't think we have a great economy, but it is not a disaster either."
The Beti shows there are signs that the SA economy is adjusting to challenges which are creating uncertainty, like load shedding, weak commodity prices, labour action and the current depressed climate.
The headline year-on-year growth for June is 2.3%. However, monthly figures are quite volatile right now, making the quarter-on-quarter growth figures of 0.4% more realistic at present, according to Schüssler.
The actual number of transactions also grew for the first time in two months, and is at 3.7% for June. This is the fastest growth since December.
The standardised value of transactions was R709.6-billion - over the R700-billion mark for the first time, with the exception of December, which is a seasonally high turnover month.
Dr Caroline Belrose, head of fraud and data analytics at BankservAfrica, explained that the quarterly changes increased by a percentage to 0.4%, which shows the volatile nature of the current economic cycle.
"However, monthly variances are even more extreme with a month-on-month decline of nearly 1% between April and May, to an increase of 0.7% between May and June. This is a 1.6% swing to the positive, which is very a strong change of direction, particularly considering that the effects of holidays and seasonality have been accounted for in these figures.” explained Belrose.
"In comparison to the last two years, the overall performance in June is impressive, although in terms of the performance of the last decade, it may be considered average. Nevertheless, in the current depressed economic climate, this month of average growth stands out."