Ed Stoddard, Business Maverick , 14 October 2020, photo credit: ChiefExecutive.net
The BankservAfrica Economic Transaction Index (BETI), a measurement of economic transactions between South Africa’s banks, improved for the fourth consecutive month in September. Economists.co.za, which calculates the index, says this is the latest indication that South Africa’s third-quarter GDP reading “will be the strongest on record”.Economists.co.za said the headline BETI in September was marginally higher for the first time in six months.
“The unexpected improvement of 0.4% − the first since March 2020 and a significant shift from -4.3% in August 2020 − is welcome news,” it said.
Of course, everything is relative. By the same measure, the economy contracted 51% in Q2, the period of course that coincided with the most stringent lockdown measures which smothered commercial activity. So while a 40% or 50% bounce-back is welcome, it hardly gets the economy back to its previous size.
Think of it this way: if an economy or GDP is worth $100-billion and contracts 50%, it is worth $50-billion. If it then expands 50%, that only takes it back to $75-billion.