Moneyweb
The devastating impact of load shedding on the country's growth prospects was thrust into the spotlight on Thursday by the Reserve Bank governor, Lesetja Kganyago.
Delivering the Bank's monetary policy statement on Thursday, he said as a result of extensive load shedding and other logistical constraints, the Central Bank was forecasting GDP growth of just 0.3% in 2023.
"The forecast takes into account ongoing high levels of load shedding and more modest household spending and investment growth than previously. Investment is still positive, but is revised down due to weaker confidence and lower growth than we previously expected," he said.
Kganyago said domestic food price inflation continues to surprise higher, suggesting that load-shedding may have broader price effects on the cost of doing business and the cost of living.
He said after the downward revisions to the GDP forecast, the risks to the medium-term domestic growth outlook are assessed to be "balanced."
"As expected for some time, commodity export prices continue to trend lower. While oil prices increased somewhat at the end of last year, compared to November, our oil price forecast is slightly lower, averaging $89 per barrel in 2023.
Meanwhile, bad news from South Africans is that the Reserve Bank has also hiked interest rates by 25 basis points to 7.25% per annum from Friday.
Kganyago said three members of the Monetary Policy Committee preferred the announced increase while two members preferred a 50 basis points increase.
"The revised repurchase rate remains supportive of credit demand in the near term while raising rates to levels more consistent with the current view of inflation and risks to it," he said.
