SARB
South Africans will be facing further headwinds after the South African Reserve Bank hiked interest rates by 50 basis points on Thursday.
This will take the repo rate to 7.75% and moves the prime lending rate to 11.25%.
Reserve Bank governor, Lesetja Kganyago, said local food price inflation was revised up, despite global food prices falling in dollar terms, in part due to the lagged impact of the weaker exchange rate.
The governor said food price inflation is now expected to be 9.9% in 2023 (up from 7.3%) and 4.5% in 2024 (up from 4.4%.)
"With core goods and food higher in the near term, headline inflation for 2023 is revised significantly higher to 6.0% (up from 5.4%). Despite this, food and fuel inflation are expected to ease, resulting in a headline forecast of 4.9% for 2024 and 4.5% in 2025."
Governor Kganyago said for this year, the Bank’s forecast for GDP growth is lowered slightly to 0.2% from the 0.3% expected in January.
"As a result of extensive load-shedding and logistical constraints, the supply performance of the economy remains severely impaired," he said.
