The South African economy may still be in decline, but the latest BankservAfrica economic transaction index (BETI) is showing some growth in August.
The economy has been plagued by a lot of recent negative economic messages, from sinking into a recession, to a decline in mining production and a lagging business confidence.
The BETI data suggest that the economy looks stronger than the previous months, but it is not yet out of the woods, according to Mike Schüssler, chief economist at Econooms dotcoza.
The standardized BETI amounted to R849.1 billion in August 2018 and the number of transactions reached a new record of 104.7 million. Schüssler said that the increase in transactions could be the result of the continuous switch to electronic payments from cash and cards and the extra money that South African officials had to spend as a result of the delayed salary adjustment payments in July and August.
On an annual basis, BETI declined faster in August by -0.8% than in July 2018 by -0.6%. However, BETI's change rate changed in the quarter that ended in August compared to the corresponding quarter that ended in May. This compares with the -1.2% change for the quarter that ended in July 2018 against the quarter that ended in April 2018.
For Schüssler this reflects a strong change in direction. "If we want to meet the dates of August 2018, this gives the hope that the technical recession will not continue in the third quarter, but this can not be confirmed yet," he said.
On a monthly basis, the rate of change between August and July was 0.9%, which is also a strong and positive improvement.
"It should be remembered that this change can be due to the counterclaim of salary increases for civil servants in July and August, as well as the late salary adjustments of Eskom employees and some municipal employees." We can still see that late payments are delayed in September with retroactive effect. , which will improve economic transaction improvements, "Schüssler said.
He warned, however, that one or even two months of data is hardly an indication of a trend change.
"The economy of SA is not yet out of the woods and even if there is growth in the third quarter of 2018, it is unlikely that this will be very strong." The delayed wage increases have certainly played a positive role, but as soon as they exit the system. the underlying downward trend can continue, "warned Schüssler.
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