Financial infrastructure services company BankservAfrica's Economic Transactions Index (BETI) increased by 0.6% month-on-month in April to reach an index level of 134.2, which is the highest level in eight months.
While loadshedding, which has remained suspended since the end of March, may have had a positive impact on economic activity in April, the upcoming elections might have also played a role, the company noted.
Additional economic activity for political party campaigns and the IEC’s preparation activities are likely to be reflected in additional retail spending.
"A detailed evaluation of the BETI around election dates in South Africa showed that, in six of the nine elections under review, economic activity picked up in the month before the election month, while in seven of the eight cases, the BETI increased in the election month itself," BankservAfrica said.
However, the economy still faces multiple challenges, including the uncertainty around the election outcome and its implications for the economy. These challenges are leading investors to take a wait-and-see approach which impacts on capital expenditure plans, said independent economist Elize Kruger.
“Assuming the election outcome will not lead to a major disruption in macroeconomic policies, a slight improvement in the economic scenario is still forecast towards the end of the year,” she said.
The headline inflation rate in December is forecast to be around 4.5% and for at least 50 basis points in interest rate cuts by year-end, it added.
Assuming that the intensity of loadshedding continues to be less than experienced in 2023, real GDP growth is forecast at 1.1% in 2024, up from 0.6% in 2023.
Although this is too low to make a meaningful dent in the unemployment rate, this is somewhat better than the previous year, BankservAfrica said.
Meanwhile, the standardised nominal value of transactions cleared through BankservAfrica in April 2024 decreased to R1.29-trillion, down from R1.305-trillion in March. The number of transactions increased to 157-million, up from 156.1-million in March.
Additionally, among the different electronic payment streams captured in the BETI, PayShap was the star performer during April in terms of the number of transactions, spiking to 6.6-million, which is almost double the number recorded in March, the payments clearing house said.