The economy may have gained some traction in the second quarter, despite global headwinds, according to the latest electronic payment activity.
The BankservAfrica Economic Transactions Index (BETI), which tracks the real value of electronic transactions processed through the country’s largest automated payments clearing house, rose to 139.1 in June from 138.5 in May. This marks the second consecutive monthly increase and a potential sign of improving underlying economic momentum.
Independent economist Elize Kruger said the improvement followed a sluggish start to 2025.
“The uptick in the BETI in June is welcomed, especially given that the economy started 2025 on the back foot, with quarterly growth of only 0.1% in the first quarter on a seasonally adjusted basis, and confidence indicators declining across the board,” she said.
While sectors such as mining and manufacturing slipped into recession earlier in the year, Kruger noted that firm indications suggested that at least the mining and manufacturing sectors were likely to show growth in the second quarter.
She forecasts real GDP to expand 0.6% quarter on quarter, up from 0.1% in the first quarter. “The upward trend is in line with the BETI indications for the second quarter.”
Still, risks remain as the global environment remains volatile.
“The renewed uncertainty about the impact of US import tariffs, not only in SA but across the globe, does not bode well for confidence and investments, and will increase the downside risk to growth forecasts in 2025 and beyond,” Kruger said.
However, a combination of resilient domestic sectors and external factors is helping to mitigate some of the pressure.
Elevated gold prices and significantly lower international oil prices could offset weaker export demand, and several commodities had been exempted from US tariffs, providing support to mining revenues.
Kruger noted that other indicators were mixed in June.
Naamsa reported total vehicle sales rose 18.7% year on year in June, with new car sales up 21.7%. The S&P Global SA PMI remained just above the neutral 50 mark at 50.1. Meanwhile, the Absa PMI improved to 48.5, remaining in contractionary territory for the eighth consecutive month, but up from 43.1 index points in May.
After reaching a record in May, the number of transactions processed through BankservAfrica moderated to 167.3-million in June, but remained 13.5% higher than a year earlier. The nominal value of transactions edged up to R1.361-trillion, and the average value per transaction rose to R7,747.
Locally, the inflation outlook continues to support potential monetary easing. “With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real increases in salaries,” Kruger said.
She expects a 25 basis-point rate cut at the Monetary Policy Committee’s July 31 meeting, “likely the final cut in the current downward cycle”.
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