PRETORIA, Jan 30 (Reuters) – Below are some quotes from South African Reserve Bank Governor Lesetja Kganyago at a news conference to announce the central bank’s latest interest rate decision.
INFLATION
“Moving to consumer prices, headline inflation averaged 4.4% last year, near the middle of our target range. Inflation slowed to 3% in December, having started the year above 5%.”
“This was mainly due to favourable goods-price developments, including food inflation reaching 15-year lows, as well as lower fuel costs.”
“Because of these transitory factors, inflation is likely to remain in the bottom half of our target range through the first half of this year.”
“Headline inflation should revert to around 4.5% thereafter, aided by core inflation which remains at or below the midpoint over the forecast horizon.”
“The risks to the inflation outlook are assessed to the upside.”
“In the near term, inflation appears well contained. However, the medium-term outlook is more uncertain than usual, with material risks from the external environment. Domestic factors such as administered prices are also problematic.”
ECONOMIC GROWTH
“For the fourth quarter, we anticipate a rebound. This will be supported by more normal agricultural production, as well as strong household spending, given tailwinds including lower inflation and Two-Pot pension withdrawals.”
“We expect potential growth to trend higher over the next few years. This gets growth to about 2% by 2027.”
“As growth picks up, we expect some rebalancing, with a recovery in investment, as well as improvements in the primary and secondary sectors.”
“The risks to the growth forecast are assessed as balanced.”
DECISION
“The Monetary Policy Committee (MPC) decided to reduce the policy rate by 25 basis points, with effect from 31 January 2025. Four members preferred this action, while two supported an unchanged stance.”
“The committee ultimately agreed that it was possible to reduce the degree of policy restrictiveness, making the stance somewhat more neutral. However, all members were concerned about the uncertain global outlook.”
(Compiled by Sfundo Parakozov; Editing by Alexander Winning)
