South African central bank governor’s comments on rate decision

PRETORIA (Reuters) – Below are some quotes from South African Reserve Bank Governor Lesetja Kganyago at a media conference on Thursday to announce the central bank’s interest rate decision.


“Better monthly outcomes have led to a downward revision in our forecast for core inflation to 5.2% in 2023 (previously 5.3%), 4.9% (from 5.0%) and 4.5% (from 4.6%)in 2024 and 2025, respectively.”

“With core goods and food inflation lower in the near term, headline inflation for 2023 is revised down to 6.0% (from 6.2%). The headline inflation forecast for 2024 also decreases to 5.0%, before stabilising at 4.5% in 2025.”

“Risks to the inflation outlook are assessed to the upside.”

“In the absence of sustained and consistent increases in energy supply, electricity prices continue to present clear inflation risks. Load-shedding and logistics constraints may also have broader effects on the cost of doing business and the cost of living. Given uncertain fuel and food price inflation, considerable risk still attaches to the forecast for average salaries.”


“While South Africa’s economic conditions appear to have improved, the longer-term outlook mirrors the uncertainty of the global environment. Prices for commodity exports continue to weaken. In addition, energy supply remains unreliable and stronger El Nino conditions threaten the agricultural outlook.”

“For 2023, the Bank’s forecast for South Africa’s GDP growth is slightly higher than in May, at 0.4% (from 0.3%). Energy and logistical constraints remain binding on the growth outlook, limiting economic activity and increasing costs.”

“Our GDP growth forecast for 2024 and 2025 is unchanged from the previous meeting, at 1.0% and 1.1%, respectively.”

“While households and firms exhibit resilience, economic growth has been volatile for some time and highly sensitive to new shocks. An improvement in logistics and a sustained reduction in load-shedding, or greater energy supply from alternative sources, would significantly increase growth.”

“At present, we assess the risks to the medium-term domestic growth outlook to be balanced.”

(Compiled by Olivia Kumwenda-Mtambo; Editing by Tim Cocks)