The BankservAfrica Economic Transactions Index (BETI), measuring the value of all electronic transactions cleared through BankservAfrica on a monthly basis at seasonally adjusted real prices, made a positive turnaround in May 2025, after months of subdued activity.
“The BETI improved to an index level of 138.3 in May, up from the 136.2 recorded in April, breaking an eight-month trend of sideways movement,” says Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements.
Despite the shift, notable risks remain, and more evidence is needed of sustained higher economic activity before the narrative of a subdued growth environment can change.
“While encouraging, it is too early to call an imminent change in trend as the economic environment has not changed materially in May and notable risks remain,” cautions independent economist Elize Kruger. “Furthermore, a part of May’s improvement stems from wiping out the weakness evident in the index in April.”
The recovery in economic activity in May followed the month of April, when the world was hit by the US announcement of punitive import tariffs and subsequently, an evolving trade war developed – with a great deal of volatility from day to day – as markets plummeted, and global and local growth forecasts were slashed. Confidence levels across the globe and in South Africa were knocked by the sheer uncertainty that these developments brought. However, with some tariffs put on ice and several countries entering more favourable trade agreements – averting a worst-case scenario – markets responded with relief rallies and a cautious return of confidence, albeit from a low base.
“Still, compared to a year earlier, the BETI is 1,4% higher and the uptick remains encouraging as all of its components increased in value terms during May,” says Kruger.
The most notable performances were the heavy weighted EFT credits, Real Time Clearing and PayShap transactions. The number of transactions cleared through BankservAfrica in May reached an all-time high of 176,3-million versus 167,9-million in April, surpassing the previous record of 172,4-million in March 2025, according to Naidoo. The standardised nominal value of transactions also increased to R1.351 trillion in May compared to R1,32-trillion in April 2025, with the resultant average value per transaction covered in the BETI increasing to R7 618, higher than April’s R7 485. All payment streams increased in both volume and value terms during May, thus a broad-based improvement is noted.
Two other timeous economic indicators also posted stronger readings. The S&P Global South Africa Purchasing Managers’ Index (PMI®) rose to 50.8 in May, driven by the sharpest uplift in private sector output in four years. Naamsa reported that the strong momentum in the local vehicle sales market continued into May 2025.
Total vehicle sales rose by 22% y/y in May 2025, with year-to-date sales up by 12.6% compared to the same period a year earlier. New car sales surged by an impressive 30% y/y, while year-to-date, sales were a notable 21,2% higher. On the other hand, the seasonally adjusted Absa Purchasing Managers’ Index (PMI), reflecting on prospects in the manufacturing sector, remained in contractionary territory for a seventh consecutive month at 43.1 index points.
“Furthermore, the BETI rebound is a timely development, given that the economy started 2025 on the backfoot – as seasonally adjusted quarterly growth of only 0.1% was registered in Q1 with sectors such as mining, manufacturing and construction now in technical recession,” says Kruger.
Economic growth forecasts for 2025 have been revised downward, with the latest Reuters consensus among economists now projecting real GDP growth at 1,2%, down from 1,7% in January. Carpe Diem Research offers an even more cautious outlook, forecasting growth at just 1%.
On the more positive side, local inflation remains well under control, with headline inflation at 2,8% in April, below the South African Reserve Bank’s 3-6% target band, and the average 2025 forecast to be around 3,4%. The favourable inflation environment has created ample scope for the South African Reserve Bank to cut interest rates.
“Even after a 25bps cut in May, the repo rate at 7.25% remains quite high, as real interest rates are still considered punitive for an economy muddling along, unable to gain meaningful momentum”, says Kruger.
Helped by some weakness in the US dollar, the rand exchange rate has recovered all of its losses post the US “Liberation Day” announcements and trading at fairly strong levels.
“The low inflation rate will play a key role in supporting the recovery of salary earners’ purchasing power. With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real increases in salaries, which should support consumer spending,” ends Kruger.