BankservAfrica picks increasing economic activity in S.Africa

In a recent interview on CNBC Africa, Independent economist Elize Kruger discussed the positive trajectory of the BankServAfrica economic transaction index, which saw a 0.3% increase in October. Kruger noted that this uptick confirms ongoing economic recovery in South Africa, with a notable 4.3% uptrend since December 2023. While acknowledging potential ebbs and flows, she emphasized the overall upward trend in economic activity. The conversation also touched on the impact of the recent two-part system withdrawals, with around 1.7 million applications totaling almost $30 billion. While the ultimate effect on retail spending remains to be seen, Kruger expressed optimism that some of the funds could stimulate the economy in the coming months. Looking ahead, Kruger highlighted key indicators that could influence the Reserve Bank's decisions, particularly stable inflation rates and potential interest rate cuts. She projected a further 25 basis points cut in the near term, with a cumulative relief of 125 basis points expected by mid-next year. Additionally, factors like lower fuel prices and increased business confidence were identified as positive contributors to economic growth. The interview also delved into the rise in transaction volumes, notably driven by new payment systems like PayShop and EFT credits. While some sectors showed stronger growth than others, Kruger remained positive about overall industry responses to the improving economic landscape. Reflecting on South Africa's growth prospects in 2025, she anticipated a broad-based benefit across various sectors, fueled by structural reforms and private sector partnerships. With momentum building, she envisioned a self-fulfilling cycle of investment, growth, and job creation enhancing the nation's economy. While optimistic about South Africa's outlook, Kruger also touched on the continent's potential, noting positive developments in intercontinental transactions. Despite challenges related to commodity prices and global economic shifts, she highlighted Africa's vast untapped potential and opportunities for growth. Overall, the interview painted a hopeful picture of South Africa's economic future and its potential impact on the wider African continent.