SA’s economy showed resilience in August, with the newly revamped PayInc Economic Index (PIEI) — formerly the BankservAfrica Economic Transactions Index (BETI) — recording its fourth consecutive monthly increase.
The refreshed index, which now captures both electronic transactions processed through PayInc and wholesale cash demand, rose to 102.8 in August, up 1.3% from July. Compared to a year earlier, the index is 3.7% higher.
With a correlation of more than 97% to quarterly GDP outcomes, this index serves as an early indicator of economic momentum, offering insights weeks before official statistics are released. By incorporating cash demand alongside digital payment flows, the index captures both the formal and informal sides of the economy.
The reading signals that the second-quarter uptick in economic activity has extended into the third quarter, despite subdued confidence. Stats SA data confirmed GDP growth of 0.8% quarter on quarter in the second quarter, outpacing expectations and aligning with the PayInc index’s trend.
“The improvement ... over the past few months is surprising given the domestic and global challenges this year,” independent economist Elize Kruger said.
Those challenges include higher US import tariffs, which took effect in the first week of August, along with logistical bottlenecks at ports and on rail, weaker trading partners and competition from cheaper imports. As a result, business sentiment remains subdued, with the RMB/BER business confidence index falling to 39 in the third quarter, indicating that just more than 60% of firms are dissatisfied with current conditions.
Still, certain sectors have provided support. Retail has outperformed the broader economy, with real sales rising 3.8% year on year in the first half of the year.
Low inflation — forecast to average 3.4% for 2025, down from 4.4% in 2024 — has also created space for the Reserve Bank to cut rates by 75 basis points so far this year.
“With average pay rises above 5%, 2025 should deliver a second year of real salary gains, supporting consumer spend,” the PIEI report reads.
Other indicators painted a mixed picture. Vehicle sales remained robust, rising 18.7% in August year on year, with new car sales surging 22.5%.
The S&P Global SA PMI, measuring private sector activity, held at 50.1 in July, while the Absa PMI slipped back into contraction at 49.5 in August, as tariffs weighed on demand.
Payments activity hit fresh highs. Transactions cleared through PayInc reached a record 177.8-million in August, just above July’s 177.5-million and up 9.4% year on year.
Growth was driven by Real-Time Clearing, DebiCheck, and PayShap, though the total nominal value of transactions fell to R1.351-trillion from July’s R1.405-trillion.
Cash demand also rose 4.4% month on month in real terms, underscoring the continued importance of cash in the economy. This is according to PayInc’s Integrated Cash Management System (ICMS) data.
Kruger warned while resilience is evident, the broader picture remains challenging: “Even with the real GDP growth for 2025 stabilising at 1% in 2025 from 0.6% in 2024, the economy is still lagging behind population growth, leading to living standards stagnating for South Africans.”
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