SOUTH AFRICAN RESERVE BANK: MONETARY POLICY COMMITTEE STATEMENT

SOUTH AFRICAN RESERVE BANK: MONETARY POLICY COMMITTEE STATEMENT

• 25 January 2024
• Monetary Policy
• SA Legal Academy

The South African Reserve Bank’s (SARB’s) Monetary Policy Committee has issued a media statement among other things announcing that the repurchase rate will remain at its current level of 8.25% per year. According to the statement, this decision was unanimous.

Noting evidence of ‘serious upside risks to the inflation trajectory from global and domestic sources, the statement describes South Africa’s economic outlook as ‘highly uncertain’. This, along with ‘high interest rates and debt’ is expected to ‘dampen investor appetite and capital flows’ – ‘resulting in volatile financial markets and asset prices’.

Not only has the SARB forecast ‘relatively weak global growth of 2.6% in 2024’: ‘the domestic GDP outcome for the third quarter of 2023 was weaker than expected, at a negative 0.2%’. Although a 0.4% improvement in fourth quarter output is anticipated, overall economic performance has remained sluggish.

Against that backdrop, the SARB’s GDP growth forecast for 2024 and 2025 ‘is unchanged from the previous meeting, at 1.2% and 1.3% respectively’. This is especially given ongoing interruptions in electricity supply and rail-port operational challenges.

• media statement

Published by SA Legal Academy Policy Watch

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