South Africa’s economic activity fell in June 2026, according to the PayInc Economic Index released on Wednesday.
PayInc said the Index declined by 0,9% on a monthly basis, following a revised 2,0% decline in May.
Shergeran Naidoo, Head of Stakeholder Engagement at PayInc, said that the Index, at 102,4, reached its lowest level since November 2025, although it remained 2,5% higher than a year earlier.
PayInc added that the first half of 2026 reflected a strong first quarter, followed by a notable moderation in economic activity during the second quarter, particularly over the past two months.
Elize Kruger, Independent Economist, said that while the signing of a peace framework between the US and Iran in June has helped ease some global tensions, uncertainty continues to weigh on business and consumer confidence. “As such, many remain cautious, delaying spending and investment decisions. This is reflected in the softer economic activity recorded during the second quarter.”
Kruger said the PayInc Economic Index measures the real value of all electronic transactions cleared through PayInc, together with a wholesale cash component.
“Despite both the volume and value of electronic transactions recovering moderately during June, the index was weighed down by higher inflation, mostly driven by elevated fuel prices,” she said.
PayInc said that following the outbreak of conflict in the Middle East, households and businesses have faced sustained pressure from elevated fuel prices and higher interest rates. “While oil prices have eased to around $72 per barrel, daily over-recoveries at the pump have narrowed to below R1 per litre for both petrol and diesel.”
Kruger said this suggests that any fuel price reduction in early August may be limited, unless the rand strengthens further or oil prices decline more meaningfully during the month. “Together with weaker confidence, these pressures are likely to weigh on economic activity in the months ahead.”
PayInc said June’s economic indicators showed a mixed picture. “The S&P Global South Africa PMI improved slightly to 50,5, signaling modest expansion, while Naamsa reported strong vehicle sales growth of 15,3% year-on-year. In contrast, the Absa PMI declined to 47,3, reflecting continued weakness in domestic demand.”
PayInc said that despite the softer economic environment, payment activity remained resilient.
Naidoo said a total of 186,8 million transactions were processed through PayInc in June, up 11,6% compared to a year earlier, while the nominal value of electronic transactions increased from R1,369 trillion in May to R1,427 trillion.
“A total of 186,8 million transactions were processed through PayInc during June, up 11,6% compared to a year earlier, while the nominal value of electronic transactions increased from R1,369 trillion in May to R1.427 trillion.”
Naidoo said the growth in digital payments demonstrates that consumers and businesses increasingly rely on electronic transactions for their everyday payment needs, even during periods of economic uncertainty.
“While traditional EFT payment streams continue to grow steadily, DebiCheck and PayShap are gaining momentum, reflecting the ongoing evolution of South Africa’s payments landscape.”
“The second quarter has demonstrated just how quickly confidence can shift in response to global and domestic developments. While electronic payments activity remains resilient, the broader economic picture suggests that growth is likely to remain subdued until inflationary pressures ease and confidence returns meaningfully,” said Kruger.
PSG senior economist Johann Els said: “The war is continuing after the tension continued on Tuesday, and this has an impact on confidence, oil price, and petrol prices. So the PayInc index decline is in line with expectations for the second quarter. There is a huge concern that this could lead to GDP (Gross Domestic Product) to decline in Q2 2026. I do believe there will be some rebound in the second half of the year.”
Efficient Group chief economist Dawie Roodt said “due to the recent data we have been seeing, there is a good chance GDP is going to record very slight growth or even negative growth in the second quarter. I’m also concerned that third quarter growth could also be low, leading to a possibility of a recession or more weak economic growth.”
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