Suspension of load shedding, elections boost economic activity: BETI

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The advent of the national elections and the suspension of load shedding has created a more productive economic environment.

According to the BankservAfrica Economic Transactions Index (BETI), electronic interbank transactions improved further in May to an index level of 136.2 basis points.

This is a third consecutive monthly increase and the highest level reached since June 2023.

BETI measures the value of all electronic interbank transactions processed by BankservAfrica.

BankservAfrica says the standardised nominal value of transactions increased to 1.3 trillion from 1.29 trillion in April.

It says this shows further recovery in electronic interbank transactions.

BankservAfrica says the further recovery is due to a multitude of factors such as temporary employment leading to the national elections.

It also indicates that the index figure gives an early indication of better economic performance in the second quarter.

Independent Economist Elize Kruger elaborates, “The BankservAfrica economic transactions index increased further during the month of May, the third consecutive monthly increase and an early signal that the quarter two economic performance will likely surpass quarter one. The main reasons for this further increasing activity during May, or to be found on the one side in another month of no load shedding, whereas also additional activity relating to the national elections held on the 29th of May could have also played a positive role, specifically given additional people employed, temporary workers employed for the national elections.”

Kruger says the prevailing uncertainty about the outcome of negotiations and what that would mean for the economy’s prospects and economic policy is keeping investors firmly in a ‘wait-and-see’ mode.

“While there is currently uncertainty about the outcome of negotiations around the new political dispensation, it’s clear that the country is in desperate need of a dispensation that will foster economic growth that will push the on structural reform, and that will address the multiplicity of challenges that the economy is facing.”

BankservAfrica says the overall BETI signals a continuation of positive momentum in economic activity.