No jumping the gun on inflation target
South Africa could reap many benefits by achieving persistently lower inflation. One way to get there, says the Reserve Bank, is by lowering the inflation target, but society will take some convincing
09 May 2024 - 05:00
Economists are starting to flag the possibility that South Africa could lower its 3%-6% inflation target to a 3% point target as early as this year’s October mini-budget, based on the strong technical arguments being pushed by the Reserve Bank.
Since 2021, the Bank has been clear that South Africa’s 4.5% inflation target remains high relative to many emerging markets, which mostly have point targets of about 3%. The higher inflation target imposes various costs on the economy and makes it less competitive...
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