Chronicle EditorCape Town. — The latest BankservAfrica Economic Transaction Index (Beti), which is usually a good barometer of growth trends within the economy, suggests a further decline in the South African economy.The Beti a measure of all South African interbank transactions under R5 million — shrank significantly in October on a monthly and quarterly basis, according to BankservAfrica’s latest Economic Transaction Index (Beti).
“The month also reflected the most negative quarterly comparison for the Beti, declining by 1 percent on the quarter from July. The quarterly comparison has been in decline for six months in a row,” said Dr Caroline Belrose, head of fraud and data analytics at BankservAfrica.
“The monthly decline was 0,9 percent between September and October — the same as the difference between September and August 2016.”
While these do not necessarily confirm that the overall economy is in a state of decline, the Beti is known for indicating growth trends within the economy. The latest Beti results, if any, reflect the economy’s continuing downward movement. That said, it is also still too early to state that the overall economy is shrinking.
However, the signs are certainly leaning towards a further decline in the South African economy more than before.
It is concerning as the fourth quarter is usually a forecast of the likely performance in the next year — going by October’s Beti results, weaker growth can be expected in 2017. This is in line with the latest manufacturing Purchasing Managers’ Index which indicates the manufacturing sector is in a state of decline.
“If economic activity levels decline again, it will be the second quarter this year in which the South African economy shrinks,” said Mike Schüssler, chief economist at Economists dotcoza.
The last three months leading into 2017 usually forecasts the economy’s performance in the New Year. — Fin24.
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