BankservAfrica notes record SA digital transactions

The latest data from BankservAfrica's Business Economic Transaction Index (BETI) reflects a marginal improvement in South Africa's economy in March compared to February. However, the country remains mired in a low-growth cycle amidst escalating global trade tensions and persistent domestic challenges. Independent Economist Elize Kruger shed light on the factors influencing this economic landscape in an interview with CNBC Africa. The global economic outlook is clouded with uncertainty and volatility, raising concerns about the potential impact on South Africa's economic performance. Kruger pointed out that despite the marginal improvement in March, the lack of clear growth signals poses a significant risk for the country's economic future. With global trade tensions on the rise and new import tariffs imposed by the U.S., there are fears of a potential global recession that could further dampen South Africa's prospects. Kruger highlighted the importance of stability in the local political environment, noting that recent developments have created uncertainty and reversed the positive trend in confidence indicators. The lack of reform certainty and policy stability is also contributing to a sense of unease among businesses and consumers, impacting overall economic activity. However, Kruger emphasized that local strategies and structural reforms could provide a buffer against global headwinds. In terms of the short-term outlook for global trade, Kruger pointed out that while South Africa has not imposed higher tariffs on its trading partners, the depreciating rand could lead to higher import prices and inflationary pressure. On the positive side, falling oil prices could result in lower fuel costs for the country, providing some relief. Kruger highlighted the need to balance the direct and indirect effects of global developments on South Africa's economy. When it comes to identifying areas of potential stability for the economy, Kruger mentioned the Safehaven flows into the gold market, which have bolstered gold prices and supported the gold production sector. She also noted that certain South African commodities were exempted from U.S. import tariffs, allowing companies to maintain production and export levels. However, the key factor to watch will be the demand for these commodities from trading partners, as global economic conditions evolve. Overall, while South Africa faces significant challenges both globally and domestically, there are opportunities for the country to navigate these headwinds by focusing on local stability, structural reforms, and strategic economic sectors. The path ahead may be uncertain, but with proactive measures and a keen eye on both direct and indirect impacts, South Africa can strive to weather the storm and sustain economic stability.