Banking transactions continue to fall amid ongoing strain in local economy: BETI

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The BankservAfrica Economic Transactions Index (BETI) has shown that banking transactions continue to fall amid ongoing strain in the local economy.

The BETI has now declined for five consecutive months reflecting the troubling months in the broader economy. The BETI reflects the total value of all economic transactions in the South African economy.

The monthly decline in the BETI reached the lowest index level this year of 130 points 7 in October.

The 12-day crippling Transnet strike that took place in October led to goods worth R65.3 billion standing idle. Compounding the problem is the ongoing rolling blackouts and the economy under pressure due to the high costs of living.

The BETI is also showing lesser growth in transactions in the economy.

“What we have observed is that there has been moderation. The average value of transactions dropped. This is a reflection of a strain in the economy; factors such as load shedding affecting the transactions,” says Elize Kruger an Independent Economist.

The SA Reserve Bank (Sarb) increased interest rates by 2 hundred and 75 basis points since November 2021 adding further strain to consumers with debt.

Kruger says Sarb is likely to increase interest rates again next week and that there is a need to start considering the impact of higher rates on the economy.

“I do think that the Reserve Bank will continue to hike interest rates and I think this will be the last one this year, we are likely to go to pre-COVID levels,” Kruger adds.

The value of transactions cleared through BankservAfrica was R1.16 trillion which was higher than a year earlier.

And Kruger expects higher transactions during this month’s Black Friday but says the value of transactions might be lower.