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Main highlights from the monetary policy statement:
- The SARB’s forecast for global growth in 2022 is revised down from the March meeting to 3.5% (from 3.7%), and for 2023 is lowered to 2.7% (from 2.8%).
- The SA economy is expected to grow by 1.7% in 2022, revised down from 2.0% at the time of the March meeting – citing electricity constraints and recent mass flooding in KZN
- Overall, and after revisions, the risks to the medium-term domestic growth outlook are assessed to be balanced.
- The current account surplus is expected to reach 2.1% of GDP this year, easing to 0.8% in 2023 and around 0.0% in 2024
- The Bank’s forecast of headline inflation for this year is revised higher to 5.9% (from 5.8%), primarily due to the higher food and fuel prices
- In the near-term, headline inflation has increased well above the mid-point of the inflation target band, and is forecast to breach the target range in the second quarter.
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The rand had strengthened against the dollar in the lead up to the announcement and continued the short term trend during and after the announcement
Daily USD/ZAR Chart
Source: TradingView, prepared by Richard Snow
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