The economy showed more signs of resilience in July, with electronic transactions reaching a new record and other key indicators turning positive, despite persistent headwinds from global uncertainty and trade tension.
The BankservAfrica Economic Transactions Index (BETI), a widely watched measure of economic activity, rose for the third consecutive month to reach 139.3 in July, a 0.2% increase from June’s level.
At this level, the index is 1.9% higher than a year ago, signalling that the second-quarter uptick in economic activity is extending into the third quarter, albeit with slightly moderated momentum.
The index reflects the real value of all electronic transactions processed through BankservAfrica each month.
“The economy continues to demonstrate resilience, though significant challenges and risks persist,” said independent economist Elize Kruger.
“In particular, uncertainty around the impact of US import tariffs — both on SA and the global economy — weighs on business confidence and investment sentiment, posing a potential downside risk to growth forecasts”.
Kruger warned that while other countries had secured more favourable US import tariffs than initially announced, SA’s non-commodity exports remained subject to a 30% tariff, effective from August 8.
Nevertheless, she praised the adaptability of local firms. “Management teams in corporate SA have stood the test of time.... There’s no doubt SA companies will rise to the challenge posed by higher US tariffs, working to mitigate the impact through strategic adjustments, supported by government initiatives — even as negotiations continue,” Kruger said.
Structural factors also support the economy. Inflation eased to 3% in June and is forecast to average 3.5% for the year.
Following the recent interest rate cut, Kruger noted that lower inflation would “support the recovery of salary earners’ purchasing power”, adding that “2025 will be the second consecutive year of real increases in salaries”.
In line with the BETI’s improvement, vehicle sales remained strong. Naamsa reported a 15.6% year-on-year increase in total vehicle sales in July, with new car sales up 20.1%.
The S&P Global SA purchasing managers index (PMI) inched up to 50.3, while the Absa PMI returned to expansionary territory for the first time since October 2024, reaching 50.8 index points.
“The improvement in economic activity during July appears to have been broad based, with gains observed across multiple sectors. This is a positive signal for underlying economic momentum and resilience,” said Kruger.
BankservAfrica also reported a new record high in transaction volumes: 177.5-million transactions were cleared in July, surpassing the previous record set in May.
While the nominal value of transactions dipped slightly to R1.338-trillion, all major electronic payment streams — except DebiCheck — increased in value.
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