Salaries increase again in real terms but slowing trend confirmed

A Civil servant salary increases and backdated payments in June have brought the average disposable salary growth back to positive real growth of nearly 1% after inflation.

The average BankservAfrica Disposable Salary Index (BDSI) is R12 849 for June, which is 5.8% higher than a year ago. This compares to civil servant gross salary increases of 6.4% and private sector increases, which averaged about 7% over the last year.

The BDSI is therefore showing slightly lower increases than gross salary increases
due to a number of factors, such as:

• lower salary increases;
• higher deductions from personal tax; and
• higher medical insurance payments (which increased by 9.5% according to StatsSA).

Click below link to download BDSI Report:
BDSI June15.pdf - 494.5 KB


BER Economic Snapshot

MPC delivers on earlier warnings with a 25bps repo rate hike
The Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) followed through on hawkish comments at the March and May interest rate meetings by hiking the repo policy interest rate by 25bps to 6%. This will increase the prime lending rate from 9.25% to 9.5%. The MPC has now resumed the interest rate tightening cycle that started with a 50bps increase back in January 2014, followed by a 25bps hike in July last year. The rate hike was justified by a further deterioration in the inflation risk factors highlighted by MPC in the recent past. Since the previous MPC meeting, the rand weakened by 3.5% against a basket of currencies of SA's major trading partners. The SARB's move has brought it "ahead of the curve" with regards to expected rate rises in the US and potentially also the UK.

Click below link to download Economic Snapshot:
BER Snapshot 2015-08.pdf - 583.5 KB


BETI Report

June shows positive upswing, balances previous poor month
The mercurial current climate of the economy continues, with the BankservAfrica Economic Transaction Index (BETI) showing its strongest year-on-year (YOY) increase since August 2013 following a relatively weak May.

What makes this performance all the more surprising is its occurrence in the face of persistent challenges, including power constraints, weak commodity prices and strikes. Despite the current depressed climate, June's index highlights that perhaps the economy is adjusting to the new situation.

Volatility remains the name of the game, as indicated by the below figures. The quarterly changes increased by a whole percentage to 0.4% from the-0.5% it was in May. This 1% increase shows the unpredictable nature of the current economic cycle, which looks even bigger examining the month-on-month decline of nearly 1% between April and May, to an increase of 0.7% between May and June. This is a 1.6% upswing to the positive - a very strong change of direction, particularly considering that the effects of holidays and seasonality have been accounted for in these figures.

In comparison to the last two years, the overall performance in June is impressive, although, in terms of the performance of the last decade, it may be considered average. Nevertheless, in the current depressed economic climate this average month stands out.

Click below link to download BETI Report:
BETI June2015.pdf - 283.3 KB


Click below link to download July 2015 Newsletter:
July 2015.pdf - 850.3 KB


Click below link to download GSB/Sake24 Consensus Poll June15:
Beeld_Jun15.pdf - 105.3 KB

Dr Clive Coetzee

General Manager:  Infrastructure Management and Economic Services

KZN Provincial Treasury

Economist (PhD UKZN)

033 897 4538

http://www.kzntreasury.gov.za