The narrative around the economy remains underwhelming due to load shedding, high interest rates, low confidence levels and a weak job market.

Although several industries have built up their resistance to load shedding in recent months, the economy is still not gaining enough momentum.

Inflation started ticking higher in August following the notable uptick in fuel price hikes. However, the international oil price has subsided in recent weeks, meaning that prices should continue to drop.

That said, inflation still remains near the upper end of the South African Reserve Bank’s 3-6% target band, meaning that interest rates will likely remain elevated for several months.

“There are already clear signs of stress among households, with data showing household credit continued to reflect the impact of weaker household finances, higher interest rates, fragile consumer confidence and cautiousness among lenders,” Kruger said.

The predicted rise in consumer inflation from 5.4% in September to 5.7% in October also does not bode well for the BETI in real terms.

Other nowcast indicators have also highlighted the drop in economic activity in October, with the S&P Global South Africa and ABSA Purchasing Managers Indices both dropping below the neutral 50-level at 48.9 and 45.4, respectively.

New vehicle sales also dropped -1.1% y/y as falling business confidence and declining disposable income impacted buyers.

In addition, the standardised nominal value of transactions cleared via BankservAfrica dropped from September’s R1.248 trillion to R1.216 trillion in October. However, the number of transactions increased to a record high of 156.6 million.

With the economy gradually switching towards digital payments, the average value of transactions is expected to drop over time. The growth in online sales is expected to feature again in this year’s Black Friday shopping.