South Africa will only see growth of 0.3% this year, says Sarb
After increasing the repo rate by 25 basis points to 7.25% on Thursday, the Reserve Bank says it now expects South Africa’s economy to grow by a meagre 0.3% for 2023 because of load shedding. The country’s economy has been brought to its knees by the effects the severe load shedding has had on businesses and households.
Chris Loewald, the head economic research and an MPC member, sought to explain this surprising number. He said third quarter data was volatile making it difficult to read what was going on. However, the MPC said this expansion was not broad-based. As a result it expected zero growth in the three months to December.
Average inflation expectations for 2023 remained elevated at just above 6% when measured against last year. However, a recent market survey puts inflation expectations at 5.5%. South Africans have expressed discomfort with the fact that inflation is eating into their incomes and South Africans should correctly expect that the central bank should do something about inflation before it permanently erodes their incomes.
"But we don’t know when the end is; so we don’t want to over burden the economy by putting on large increases.
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