The BankservAfrica Economic Transactions Index (BETI) in October had a modest year-on-year increase of 1%, BankservAfrica said on Thursday. But the devil is in the monthly detail – and it points to an economy in distress. 

The BETI declined 0.2% in October, its fifth consecutive monthly decline, to 130.7, its lowest level this year. And it’s well below the 143.3 level reached in May.

“While the BETI already signalled the probability of an economic contraction in Q3, the first indications for Q4 do not look encouraging either,” BankservAfrica said in a statement. 

In September, the lights literally faded over the economy as load shedding cranked up to massive levels. That abated somewhat in October, but then the 12-day Transnet strike took a sledgehammer to the recovery from that.

The bottom line is that the BETI’s performance over the past few months is among a plethora of indicators suggesting that the economy may – and the jury remains out on this one, it must be said – have contracted in Q3 after shrinking 0.7% in Q2. 

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That would equal a recession and mean current economic growth forecasts for the full year, such as Treasury’s of 1.9%, would need to be whittled down. That in turn would mean Treasury’s projections for revenue collection and debt-to-GDP ratios would also require adjusting, and not in a good way. This, by the way, is hardly unprecedented. 

And the outlook remains bearish, to borrow a term from equity markets, not least because of a certain war in eastern Europe launched by a country often associated with the large mammal. 

Alarm bells are ringing about the global economy – the IMF’s recent projections on that front have just gone from gloomy to gloomier – and South Africa’s relatively open economy can hardly navigate such a scenario unscathed. 

IMF’s global growth forecast worsens from ‘gloomy’ to ‘gloomier’

Meanwhile, Eskom has announced that “protracted load shedding” will continue for “six to 12 months” as it seeks to keep undoing the damage wrought by years of neglect, while its capital investment projects will also dim the lights before such initiatives flicker into life. 

Read more in Daily Maverick: “Brace for another six to 12 months of rolling blackouts, warns Eskom”

Domestic inflation may have peaked in July – hopefully – but the surging cost of living is still straining households while interest rates rise, a point reflected in weak retail sales and disappointing results from retailers such as Spar. 

Read more in Daily Maverick: South Africa’s weak September retail trade sales point to possible recession”

The post-pandemic bounce has faded, and data such as the BETI indicate that the South African economy remains ill amid a worsening prognosis. DM/BM