“The first positive … BETI in six months shows that the South African economy recovered in October,” BankservAfrica, an automated clearing house in Johannesburg, said in a statement, adding that despite the low 0.2% reading, it is the best number in seven months.
The monthly change which increased by 0.6% in September is a positive sign, according to BankservAfrica. The company said South Africa is still feeling “stronger and more robust economic trends” but quarterly numbers are still negative mainly due to a very weak August.
“The actual BETI number was 121.1, which was the highest in three months, further reinforcing the recovery trend. Although this recovery is becoming entrenched, the speed is still debatable.”
However, once the next set of numbers came in it is likely that the quarter-on-quarter changes would be positive. The current electricity problems may pose a challenge.
“What is, however, still a problem is that strikes, such as the post office strike, are still impacting negatively on economic performance.
“Many postal cheques have probably been delayed and this is reflected in the fact that the number of cheque transactions declined by over 30% for the first time since April, when there was also a partial post office strike,” said BankservAfrica.
Adding, BankservAfrica said the average decline of 26.2% over the last 12 months is also very high, partly due to the post office strike.
The standardised BETI indicated that nominal transactions reached R675-billion for the month, an indication that South Africa’s economy is recovering.
“With both September and October breaking the downward trend, it should be safe to assume that the South African economy is showing some bounce-back. Hopefully the current power constraints do not again change the recovery trend.”
But the latest BETI still shows that the South African economy “is not completely out of the woods”. “We now expect growth closer to the two percent to 2.5% range in the fourth quarter for South Africa.
“However, one must also take the effect of the power situation into account. We will not have a clear picture of this until the November data is available,” said BankservAfrica.