‘Winter has arrived for SA economy’ – expert
The biggest drop in transaction volumes in more than a decade could be an indication that winter has also arrived for the economy,
according to an economist.
Latest figures released by BankservAfrica Economic Transaction Index (BETI) show a depressed economy but the year-on-year number is still positive, growing by 1.6% in May.
Load shedding has clearly had a disruptive effect, with the almost daily occurrence of power cuts in April and May putting a damper on electronic transactions.
The impact of disruptive electricity supplies and slower world economic growth is distinctly reflected in the numbers, which show the sharpest decline on a quarterly basis since October 2014, and the biggest monthly drop since August 2014.
Mike Schussler, chief economist at Economists dotcoza, said: “With both consumer and business confidence down, the decline in economic transactions, as represented by the BETI, indicates the economy is under duress rather than expanding. Perhaps winter has also arrived for the economy.”
Dr Caroline Belrose, head of fraud and data analytics at BankservAfrica, said that
the 5.9% drop in transaction volumes is the biggest in more than a decade, and the first time that – for two months in a row – the actual number of transactions declined while the average values increased to greater than inflation.
“The quarter-on-quarter decline of 0.6% is less severe than the monthly decline; however, the strong April numbers serve to highlight how weak the South African economy was in March and May this year,” said Belrose.