KZN Provincial Treasury - BETI REPORT:Economic growth remains subdued in March:BETI & co-incident indicators on a quarter on quarter percentage change basis RSS KZN Provincial Treasury - BETI REPORT:Economic growth remains subdued in March2016-05-13
Mike Schüssler
April 2016
Economic growth remains subdued in March The March 2016 BankservAfrica Economic Transaction Index (BETI) shows a slight improvement over March a year ago, but this improvement was significantly more modest than the February numbers. In February the month-on-month change was a very strong 2.2% while the year-on-year figures were 0.2% weaker. In March the monthly change is a mere 0.4% while the year-on-year change jumped up to 0.8%. This is because weak data from last year inflated the calculation of the annual change. The BankservAfrica methodology for these calculations makes provision for working days as well as public holidays, meaning this month’s data is affected by the three holidays that fell in March this year, with Easter falling unusually early in 2016. With the holidays taken into account, it was expected that the March data would be a little stronger, while the opposite effect should be visible in April. The methodology allows BankservAfrica to view the underlying trend in economic transactions in the economy. The BETI indicates that modest growth is still underpinning the economy, with declines seen in some months. We refer to this as stagnation, as economic growth remains weaker than population growth and the average person is therefore getting poorer. The actual underlying trend is for growth of less than 1% in the first quarter of 2016 despite the extra leap year day in February. The effect of the drought and the lower commodity prices are still impacting the economy, but many of these effects have yet to reflect on economic growth and are likely to deepen over time. BankservAfrica cautions that while the South African economy is likely to remain modest and a decline in the economy is not likely, given the weak January figures and the earlier-than-usual Easter holidays a decline in GDP cannot be ruled out in the first quarter of 2016. The two-year trend of weak growth and stagnation continues, and economic growth forecasts are very likely to decline further. Transaction numbers grow, average value declines When compared to March last year, there was a growth of 3.7% in the number of transactions but the average value of the transactions declined by 1.1% to R8 451. The total transaction value (being the actual value) was up 2.5% in nominal terms. The transaction numbers are not seasonally adjusted and the impact of public and religious holidays are not taken into account, but the raw data for March looks weaker than the adjusted data that is used in the BETI. Real values would indicate a decline, hence BankservAfrica cannot rule out an actual economic decline, but with seasonal adjustment it seems unlikely, according to the latest BETI results.
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Dr Clive Coetzee
General Manager: Infrastructure Management and Economic Services
KZN Provincial Treasury
Economist (PhD UKZN)
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KZN Provincial Treasury - BETI REPORT:Economic growth remains subdued in March
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