The BankservAfrica Economic Transactions Index (BETI) slipped to 133 in July, compared with 133.9 in June, mirroring the less-than-positive economic indicators that emerged during the month.

“Though still on track for second-quarter growth, the latest data reveals a muted start for the next quarter. Unlike the annual decline of 7.4% experienced in May and 1.8% in June, the BETI fell by only 0.9% in June.

“Though still negative, the decline was markedly less significant compared to previous months as a result of the low base calculation,” says BankservAfrica stakeholder engagements head Shergeran Naidoo.

However, the BETI remains volatile on a month-to-month basis.

The short reprieve from domestic developments, specifically the lower levels of loadshedding for most of June, was rapidly reversed at the beginning of July with the return of Stage 6 loadshedding and the renewed tension in the transport sector on major corridors interrupting normal practices and negatively impacting business confidence.

“The strong outcome in June was encouraging, however, we cautioned that the improvement would not necessarily be the start of a sustained synchronised economic recovery. However, the index level for July is still in line with the second quarter average and only slightly below the January level of 133.2,” says independent economist Elize Kruger.

“Given that the BETI is reflected in real terms, the notable moderation in inflation over the past few months has had an underlying positive impact on the index’s performance.”

Consumer inflation moderating to 5.4% year-on-year in June will provide some relief for many households and companies.

Further, the standardised nominal value of transactions cleared through BankservAfrica in July 2023 was R1.19-trillion compared to June’s R1.21-trillion. The number of transactions reached an all-time high of 149.4-million in July, up from 145.3-million in June.

“The lower July BETI signals a muted start to the third quarter with many challenges remaining, such as elevated interest rates, policy and political uncertainties, low confidence levels and logistical constraints,” Kruger says.

However, the recent pledge by CEOs of South Africa’s top companies to assist government in getting the economy back on track could make a difference in due course.

Meanwhile, the average value of transactions cleared through BankservAfrica, for electronic and PayShap transactions, dropped by 7.9% to R7 911 compared to R8 590 in July 2022, highlights Naidoo.

The value of digital payment platform PayShap relative to the total standardised nominal value of electronic transactions cleared through BankservAfrica has been on the rise over the past months.