Ina Opperman

By Ina Opperman

Business Journalist


Unlikely that slightly improved BETI signals economic recovery

The BETI is a very fast and broad overview of current economic trends over a broad range of sectors based on economic transactions.


It is unlikely that the latest slight improvement in the BankservAfrica Economic Transactions Index (BETI) in April signals a notable recovery phase in the economy as the index deteriorated on an annual and quarterly basis, as well as the preceding two months. BankservAfrica is a payment enabling organisation operating between the various South African banks. It is a very fast and broad overview of current economic conditions and trends over a broad range of sectors, making use of economic transactions as captured by BankservAfrica. The BETI reached an index level of 132.6 in April, almost on par with the level…

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It is unlikely that the latest slight improvement in the BankservAfrica Economic Transactions Index (BETI) in April signals a notable recovery phase in the economy as the index deteriorated on an annual and quarterly basis, as well as the preceding two months.

BankservAfrica is a payment enabling organisation operating between the various South African banks. It is a very fast and broad overview of current economic conditions and trends over a broad range of sectors, making use of economic transactions as captured by BankservAfrica.

The BETI reached an index level of 132.6 in April, almost on par with the level of 132.9 in January. However, BETI declined by 3.5% on an annual basis.

The slight improvement in the BETI occurred against a fairly grim economic context in April of unabating rolling blackouts, interest rates and inflation remaining at elevated levels and the global economic slowdown and therefore, the slight improvement signals the South African economy’s resilience, despite the ongoing challenges, says Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.

“In the past nine months, the BETI moved mostly sideways, with some volatility from month to month which confirms that the economy remains in a ‘muddle-along-little-thriving’ narrative, which is also evident in other indicators,” says independent economist, Elize Kruger.

ALSO READ: Economic activity, manufacturing output continue to decline

All indicators and BETI show deteriorations in business conditions

After moving sideways in December 2022 (53.1) and January 2023 (53.0), the Absa Purchasing Managers’ Index (PMI) plummeted to 48.8 index points in February and even further to only 48.1 in March, before recovering to 49.8 in April.

Kruger says April was the third straight month that the index pointed to a deterioration in business conditions in the manufacturing sector. The S&P Global South Africa PMI also signalled dismal economic activity in the private sector, dropping from 50.5 in February to 49.7 in March and further to 49.6 in April, remaining below the 50.0 neutral mark.

According to the report, business activity at South African firms continued to contract at the start of the second quarter, as a slight lift in demand was more than offset by capacity constraints due to rolling blackouts and supply shortages.

The resilient vehicle market also faltered since March, with the motor industry selling 37 107 cars and commercial vehicles in April, which was 0.2% fewer than in April 2022.

Passenger car sales took the biggest knock, dropping 6.0% compared to April last year from 31 631 to 24 174 in April 2023. 

ALSO READ: Drop in economic transactions signals SA’s deteriorating economic activity

Global economic conditions not great either

Globally April saw a further marginal increase in global manufacturing production, as improved supply-chain conditions and the clearance of existing backlogs offset weaker demand, but the J.P.Morgan Global Manufacturing PMI™ remained unchanged at 49.6 in April, the eighth successive month below the neutral 50.0 mark, signalling ongoing strain in the global manufacturing sector, Kruger points out.

However, the broader J.P.Morgan Global Composite Output Index rose to 54.2 in April, up from 53.4 in March, signalling expansion in each of the past three months.

Kruger says this is clearly not a synchronised global recovery across all sectors, although pockets of growth are evident.

Naidoo says the standardised nominal value of transactions cleared through BankservAfrica in April was R1.22 trillion compared to March’s R1.19 trillion, while the number of transactions moderated from an all-time high of 149 million to 135.9 million in April 2023, partially due to the many public holidays in April.

The average value of transactions covered by the BETI has declined over time, especially in the last six months. In April, the average value was R7 718, 6.4% lower than the average recorded a year ago. Naidoo says this confirms the growing trend in electronic payments.

“While the BETI reflected a small increase in April, the other nowcast indicators confirm our doubts that this is the start of a notable recovery phase for the economy. South Africans should prepare themselves for ‘more of the same’ for a longer period than hoped for,” Kruger warns.

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