EXCERPTS – South African central bank comments as rates remain unchanged

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JOHANNESBURG, September 23 (Reuters) – Below are some quotes from South African Reserve Bank Governor Lesetja Kganyago on Thursday as he announced the central bank’s decision to maintain its benchmark repo rate at 3.5%.

INFLATION

“Headline consumer price inflation for 2021 is revised slightly upwards to 4.4% (from 4.3%) and remains unchanged at 4.2% in 2022 and 4.5% in 2023.”

“Core inflation forecasts are revised up to 3.0% in 2021 (from 2.9%) and to 3.8% in 2022 (from 3.7%). is expected to be 4.3% in 2023, unchanged from the July forecast. “

“The Bank’s forecast reflects higher headline inflation for the remainder of this year, before moderating in 2022.”

“Risks to the short-term inflation outlook are assessed on the upside.”

ECONOMIC GROWTH

“We expect the economy to experience revised upward growth of 5.3% this year (from 4.2%), despite the much larger negative effect on output than previously estimated. from the July unrest. Our revised estimate of third quarter economic growth is -1.2%, down from the previous -0.5%. “

“The events of July and the pandemic are expected to have lasting effects on investor confidence and job creation, hampering recovery in the labor-intensive sectors hardest hit by the lockdowns. GDP is expected to grow by 1.7% in 2022 (against 2.3%) and by 1.8% in 2023 (against 2.4%).

“Overall, and after revisions, the risks to the medium-term domestic growth outlook are considered to be balanced, as most of the rebound in the recovery is now in the past.”

DECISION

“With inflation expectations largely unchanged and even with upside risks remaining, the Committee expects inflation to remain close to the midpoint over the forecast period.”

“In this context, the MPC decided to keep the rates unchanged at 3.5% per annum. The decision was unanimous.”

“The implicit path of policy rates in the Quarterly Projection Model (QPM) indicates an increase of 25 basis points in the fourth quarter of 2021 and further increases in each quarter of 2022 and 2023.” (Reporting by Olivia Kumwenda-Mtambo, Alexander Winning and Promit Mukherjee; editing by Emelia Sithole-Matarise)


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