South Africans changing spending habits due to financial pressure, index shows
Fin 24 - Aug 22nd 2018, 09:22
South Africans are under financial pressure and have adjusted their spending behaviour to weather the economic headwinds, according to Shergeran Naidoo, head of stakeholder relations at BankservAfrica.
She was commenting on the results of the latest BankservAfrica’s latest Economic Transaction Index (BETI) released earlier in the week.
The BETI transactional value for July was 127.3, lower than any reading since March 2017, according to Naidoo.
The index indicates that the SA economy continues to show signs of slowing down. It shows economic transactions in July implies that the SA economy is failing to track growth as positively as the rest of the world. The BETI is based on interbank transaction data, excluding salary and card exchanges.
In July the economic transactional data declined by 0.4% on a year-on-year (y/y) basis, 1% down from the three months prior and by 0.3% in comparison to June’s figures.
Mike Schüssler, chief economist at Economists dotcoza, said the BETI shows that the gains made in the SA economy in the second half of 2017 and in the first months of 2018 have been lost.
“These are not positive for economic growth, particularly for addressing key concerns such as rising unemployment. The economy is caught between a slow growth and slow decline place and SA is not benefiting from the surge in economic growth currently being experienced in the rest of the world,” said Schüssler.
Although the June 2018 quarterly data has been revised from -1.9% to -1.8% due to seasonal adjustments, it is still very unlikely the revised 1.2% economic growth anticipated by the SA Reserve Bank (SARB) will happen, in his view.
“One would assume the current data suggests leadership changes in government has not yet had the positive impact one would have hoped for," he said.
Average value per transaction
Meanwhile, the BETI shows that the average value per transaction declined for 15 consecutive months.
According to Naidoo, these declines are only surpassed by the data that followed the 2008/2009 global financial crisis. However, the current declines are not close to the large double-digit ones in that period.
This decline in the average value per transaction is juxtaposed against a number of transactions which is increasing. The number of actual transactions within the BankservAfrica Economic Transaction Index was 101.1 million in July. This was 9.5% more than July 2017, according to Naidoo.
“This growth suggests individuals and firms are transacting by electronic means. It could also demonstrate that more of the players that have recently entered the system are substantially smaller than those already in the payments system," said Naidoo.
Therefore, while the total nominal transactional value increased by 3.9%, the average transaction value was less – even in nominal terms. Naidoo said this creates a strange situation in that actual real values are decreasing, but more transactions are taking place.Fin 24
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