BankservAfrica's indices reveal mixed signals for South Africa's economy in March

BankservAfrica's much-anticipated Take-home Pay Index (BTPI) is set to reveal a small dip for March 2025, marking a slight retreat in the wage landscape of South Africa.

Nonetheless, analysts at BankservAfrica asserted on Wednesday that the overall trend remained upward, buoyed by improving economic conditions in recent months, challenging the prevailing headwinds of escalating global trade tensions and increasing political uncertainty at home.

Earlier this month, BankservAfrica showcased its Economic Transaction Index (BETI), which displays the standardised value of all economic transactions in the South African economy at seasonally adjusted real prices (2005=100).

Notably, the BETI indicated a modest recovery in March 2025, with some crucial adjustments accounting for recent fluctuations.

Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements, reported that the BETI rose to an index level of 137.1 for March, reflecting a growth of 0.3% from February’s figure of 136.6. Despite this marginal increase, it remains slightly below the January level of 137.2.

Importantly, this annual data still suggested a healthier purchasing environment, driven by a headline inflation rate of 3.2%, which facilitates an increase in real wages and thus supports consumer buying power, in tandem with decreasing fuel prices and lower interest rates.

"However, concerningly, this level fell slightly below the 137.2 recorded in January," Naidoo said.

"Despite the mostly sideways movement, the BETI remains 2.8% above a year earlier, reflecting the favourable retail environment driven by headline inflation at 3.2% - supporting an increase in real wages and purchasing power - in addition to the fuel price drop and the interest rate at 75bps lower than a year earlier."

However, independent economist Elize Kruger warned that the BETI's performance still suggested the economy was "stuck in muddling-along mode".

This stagnant growth, marking a continuous pattern since mid-2024, raises alarms about South Africa's overall economic resilience, especially as population growth continues to outstrip economic progress.

"The lack of momentum in economic growth is concerning, as the economy remains on the back foot, with population growth outpacing economic growth, minimal progress on employment, a precarious fiscal position, and limited capacity to absorb unexpected shocks – especially given current global developments," Kruger said.

Meanwhile, BankservAfrica said that while it was still early days to measure the full impact of recent developments, Carpe Diem Research Services had revised the real GDP growth forecast for 2025 to 1.0% from the previous 1.5%. In 2024, South Africa’s growth rate was 0.6%.

"Other economic indicators were mixed in March, sending conflicting signals about the strength of the unfolding cyclical economic recovery. The S&P Global South Africa Purchasing Managers’ Index (PMI) remained below the 50.0 ‘no-change threshold’ for the fourth consecutive month," it said.

BUSINESS REPORT