A recovery in the latest BankservAfrica’s latest Economic Transactions Index (Beti), leading to its highest score in the past year, hints that SA’s economy might have fared better than expected in the second quarter.
In June, the index recovered to 133.6, up 1.3 points from May, helping it to reach its best score since June 2022.
“Although the index has been choppy in recent months, moving mostly sideways in the past year, the recovery in June is encouraging and reflects the positive impact of a few specific factors in the economy in June,” independent economist Elize Kruger said.
But she warned that the improvements in the index are “not necessarily the start of a sustained synchronised economic recovery” as elevated interest rates, low consumer confidence, high unemployment, policy and political uncertainty remain.
The index remained in negative territory on an annual basis, but it was less so than in the preceding months as it declined 2% in June compared to 7.4% in May.
One contributing factor to the recent recovery was Eskom’s implementing load-shedding amounting to 712GWh of power in June compared to 2,042GWh in May, propping up various sectors, while some are weaning themselves off the troubled state-owned power utility to the alternative energy sources.
New domestic vehicle sales, which grew 14% month on month, also provided a boost as it exceeded expectations last month. Aggregate sales for the first half of 2023 were up 4.8% year on year, driven by light commercial vehicle sales.
Lower consumer inflation, easing from 7.1% year on year in March to 5.4% in June, helped bring inflation back in line with the SA Reserve Bank’s target band of 3%-6% for the first time since April 2022.
“The moderation in consumer inflation will go some way in reducing the extent of the erosion of purchasing power that households have had to deal with, especially in the past year,” Kruger said.
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