Cape Town - Although the South African economy is still in stagnation mode, it will probably not end up in a technical recession in the second quarter, Mike Schüssler, chief economist at Economists dotcoza, told Fin24 on Wednesday.
He was commenting on the June 2016 BankservAfrica Economic Transaction Index (Beti) report. The Beti measures all SA interbank transactions under R5m. The latest data shows there are no indications that growth levels will pick up in the immediate future as economic transactions oscillate between negative and positive on a monthly basis.
"Retail sales for May astounded and manufacturing is showing signs of picking up after five years of rand weakness. The patient is out of the intensive care unit, but still in hospital," explained Schüssler.
The June 2016 Beti recorded a slight month-on-month increase of 0.3% after experiencing a significant drop in May 2016. This is the lowest increase this year and adds to the downward year-on-year trend. Along with below inflation credit growth, economic transactions also indicate that bank customers are transacting more, but at a very slow rate.