Reserve Bank slashes 2018 growth forecast
Bank governor Lesetja Kganyago says the domestic growth outlook remains 'challenging', and demand pressures do not pose a risk to inflation
The Reserve Bank slashed its growth forecast for 2018, a major setback for President Cyril Ramaphosa’s goal of boosting the economy and making headway in cutting a near 30% unemployment rate. GDP will expand 1.2% in 2018, compared with a previous estimate of 1.7%, Bank governor Lesetja Kganyago said in Pretoria on Thursday. The Bank expects the growth rate to accelerate to 1.9% in 2019 and 2% the following year, still a percentage point below the 3% rate that Ramaphosa is targeting for the current year, a figure that is also out of line with the Treasury’s predictions. The economy probably grew marginally in the second quarter, meaning that SA at least avoided slipping to its first recession since the outbreak of the global financial crisis a decade ago. GDP shrank 2.2% in the first three months of 2018. The monetary policy committee (MPC) on Thursday kept the repo rate at 6.5%, in line with economists’ forecasts, and the subdued growth forecasts mean the rate is unlikely to rise in...
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