South Africa gauge signals poor start to final-quarter economic growth
An index measuring South African economic transactions fell to a 10-month low in October after a strike at the State-owned port and rail operator hobbled exports, suggesting a weak start to the final quarter.
The BankservAfrica Economic Transactions Index, which tracks interbank payments, dropped to 130.7 from a revised 131 in September, signalling ongoing strain in the economy, independent economist Elize Kruger said in a statement.
Labour unions at Transnet went on a 12-day pay strike last month curtailing mineral, agricultural and manufacturing exports. The Minerals Council South Africa estimated that the industrial action cost mining companies about R815-million a day.
In addition to the strike and ongoing power cuts, “the economy has also been buckling under the significant rise in the cost of living,” said Kruger. The South African Reserve Bank has increased interest rates by a cumulative 275 basis points since November 2021 to curb surging prices, adding to pressure on consumers with debt exposure.
Another hike is expected on November 24, when the central bank’s monetary policy committee is due to announce its final interest-rate decision of the year, Kruger said. That may crimp economic expansion in the coming months because household spending accounts for about two-thirds of gross domestic product.
Slowing global growth may also weigh on the economy. International trade flows in October continued to dwindle in the face of heightened economic, inflationary and political pressures, according to Kruger.
The deteriorating economy may result in labour protests and potential social unrest, which the country can ill afford, she said. “Much needed infrastructure upgrades -- including road, rail, power and water -- and broader structural reforms are urgently needed to address the declining trajectory of the South African economy.”
The central bank and National Treasury predict the economy will expand by 1.9% this year, though the former may revise its forecast next week.
BETI is an early economic scorecard for South Africa in terms of growth trends and correlates closely with the central bank’s co-incident indicator and GDP data.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation