Tue, 04 Aug 2020

An economic index that tracks interbank payments suggests that South Africa can expect flat economic growth for the third quarter of the year.

The BankervAfrica Economic Transactions Index for August was published on Wednesday. Quarterly and the monthly numbers both showed declines of 0.9% in August.

"The [index] suggests the economy is stagnating again. It is clear that the strong positive GDP growth of Q2 2019 will be substantially softer in the third quarter as the data thus far shows," BankervAfrica said in a statement.

It said that while changes in metrics for September could still alter third quarter growth, current data for the quarter "gives little hope of another quarter with a 3% GDP increase".

SA's quarterly economic growth rate plunged at the start of the year, declining by a restated 3.1% - its biggest fall in a decade. But unlike the start of 2018, the county didn't fall into at recession after growth in the second quarter rebounded by 3.1%.

The country's predicted GDP growth rate has been repeated downgraded this year, while unemployment has risen to record highs.

On Tuesday ratings agency Moody's lowered SA's 2019 growth rate to 0.7%, in line with predictions previously made by the SA Reserve Bank. The agency said, however, there was a low likelihood that it would downgrade SA's sovereign credit rating to junk in the near future.

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