All BETIs are off as key Economic Transactions Index takes a tumble

The BETI fell 0.5% from February to 130.2 in March, its lowest read since December 2021 when its index level was 130.1. 

“Ongoing load shedding, a further 50 basis point hike in interest rates and inflation remaining sticky (especially food price inflation) are all factors that are holding the economy at ransom. Early indications suggest economic growth stagnated in Q1, with the BETI signalling the strong possibility of a negative quarterly growth rate in Q1 2023,” BankservAfrica said.

“Negative quarterly growth” – banned terminology among Business Maverick correspondents – means the BETI is signalling that the economy likely contracted in the first quarter (Q1) of this year. After shrinking 1.3% in Q4 of last year, that would mean the economy has fallen into a recession, which is defined as two straight quarters of contraction in gross domestic product (GDP). 



The BETI read follows news on Tuesday that South African manufacturing production fell 5.2% compared with February of last year and 1.3% on a monthly basis, another clear sign of economic stagnation. 

“The March BETI was 3.6% lower than a year earlier, and also declined on a monthly and quarterly basis. It is increasingly clear that the weakness in the economy has become quite broad based, with most sectors under severe pressure,” BankservAfrica said. 

It also noted that: “Even the resilient vehicle market faltered in March. The motor industry sold 50,157 (new) cars and commercial vehicles last month — 0.6% fewer than the 50,465 recorded in March 2022.”

When new car sales shift into a lower gear in South Africa, you know the economy is littered with potholes. 

The sheer intensity of Eskom’s power cuts to stave off a grid collapse is simply shredding economic activity while sharply raising the costs of doing business. The BETI read is just the latest data set that will give investors pause as South Africa once again holds its annual “Investment Conference” in Sandton on Thursday. DM/BM