South Africa’s economic activity, as measured in the BankservAfrica Economic Transactions Index (BETI), declined on a monthly and quarterly basis in March to 130.2 and reached its lowest level since December 2021.

Further, the March BETI was 3.6% lower than a year earlier, the organisation noted.

“Reflecting the growing weakness in the economy on a monthly basis, the index was 0.5% lower than in February,” said financial infrastructure services company BankservAfrica stakeholder engagements head Shergeran Naidoo.

However, the further moderation in the BETI during March was not unexpected as the dismal economic environment prevails. Ongoing loadshedding, a further 50 basis points hike in interest rates and inflation remaining sticky, especially food price inflation, are all factors that are holding the economy at ransom, he added.

Early indications suggest economic growth stagnated in the first quarter of the year, with the BETI signalling the strong possibility of a negative quarterly growth rate in the first quarter. The March BETI was 1.7% lower than in the quarter ending December 2022.

“It is becoming increasingly clear that the weakness in the economy has become quite broad-based, with most sectors under severe pressure,” said independent economist Elize Kruger.

“The ongoing moderation in the BETI, after only two months of marginal improvement in December 2022 and January, confirms that the environment remains challenging. While actions were recently taken and projects have been announced in the energy and transport sectors of the economy, South Africans should prepare themselves for more of the same for longer than hoped for,” she said.

However, the standardised nominal value of transactions that cleared through BankservAfrica in March 2023 was R1.19-trillion compared to February’s R1.17-trillion.

Further, the number of transactions increased notably from 133-million in February to an all-time high of 149-million in March 2023, which is a monthly increase of 12.1%, noted Naidoo.

Compared with a year earlier, the number of transactions, or total of debits and credits, increased by a notable 13.6% in March. This appears to be owing to the strong growth trend in the real-time clearing, increasing 15.1% month-on-month, and electronic fund transfer credits excluding salaries, increasing 17.4% month-on-month, electronic payment streams, he said.

"In both these categories, although the number of transactions increased notably, the average value of transactions declined. This probably confirms the growing trend in electronic payments as the economy migrates, slowly, to digital payments," he highlighted.