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SA economic activity grew in April even as floods hit

EFT-originated transactions, increased to 136.1 from a revised 135.2 in March, signaling the resilience of South African consumers and businesses.
Image: Waldo Swiegers/Bloomberg

A gauge measuring South African economic activity rose for a fourth month in April even as record-high commodity prices peaked and the worst flooding in almost three decades left more than 400 people dead, damaged businesses and halted operations at the nation’s biggest port.

The BankservAfrica Economic Transactions Index, which measures EFT-originated transactions, increased to 136.1 from a revised 135.2 in March, signaling the resilience of South African consumers and businesses, the automated clearing house said in a statement.

While the slight increase suggests a steady start to the second quarter, looming headwinds may derail the economic momentum in the next few months, said Mike Schussler, chief economist at Economists.co.za, which helped develop the barometer.

South Africa’s economic growth potential, which is already being crimped by surging oil prices, frequent power cuts and flood damage in the Eastern Cape and KwaZulu-Natal provinces, is also likely to face further strain from a slowdown in global output and demand for metals.

The International Monetary Fund in April slashed its world growth forecast by the most since the early months of the Covid-19 pandemic and projected even faster inflation after Russia invaded Ukraine and China renewed virus lockdowns.

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 the gross domestic product data.

© 2022 Bloomberg

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