Economists analyze the likelihood of further repo rate cuts in South Africa in 2025 after two consecutive cuts in late 2024. While inflation concerns and geopolitical risks pose challenges, a combination of benign inflation figures and the Sarb's commitment to easing monetary policy suggest that at least one more cut is possible.
Economists are closely watching the South Africa n Reserve Bank ( Sarb )'s next move on interest rates after two consecutive cuts of 25 basis points at the end of 2024. While initial optimism predicted at least three cuts in 2025, Thursday's anticipated cut might be the last due to rising inflation and geopolitical uncertainties.
However, most experts still anticipate at least one more reduction this year, primarily driven by the recent positive inflation figures and a relatively subdued outlook for the coming months.Inflation is projected to average a modest 4% in 2025, with upward pressure primarily stemming from food and fuel prices as they rebound from recent lows. Despite anticipated increases in global food prices and a weaker rand, domestic production should benefit from favorable rainfall, mitigating the inflationary impact. Conversely, fuel price deflation is expected to gradually reverse as global oil prices stabilize and the rand weakens.While the Sarb acknowledges the risks of rising inflation and a volatile rand, they remain optimistic about further rate cuts. Recent developments, such as the renewed pressure on the rand due to the anticipated impact of the second Trump administration's economic policies and rising global oil prices, have added to the uncertainty. Nevertheless, the Sarb's Monetary Policy Committee (MPC) believes that the current room for easing, coupled with the relatively subdued inflation outlook, justifies further moderate policy adjustments
Interest Rates South Africa Sarb Inflation Economic Outlook Monetary Policy
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
South Africa's Interest Rate to Remain Stable at 7.50% in 2025The Monetary Policy Committee (MPC) is expected to keep interest rates stable at 7.50% for the remainder of 2025, following a recent reduction to 7.75%. Analysts predict limited further cuts this year, mirroring the US Federal Reserve's stance. Positive economic indicators such as higher GDP growth and a decrease in the national debt could lead to a credit rating upgrade within the next three years.
Read more »
Petrol and Diesel Prices in South Africa to Rise in 2025The global price of petrol increased in December, coupled with a weaker rand against the US dollar, leading to an anticipated rise in petrol and diesel prices for South African motorists in January 2025.
Read more »
South Africa's Public Holidays and Long Weekends in 2025Find out all the public holidays and long weekends in South Africa for 2025. Discover the dates and plan your vacations accordingly.
Read more »
Make Your Own Luck: A Call to Action for South Africa in 2025The author argues that the current government is failing to provide for South Africans and calls on citizens to take charge of their own destinies. He emphasizes the need for entrepreneurship and self-reliance in the face of rising costs and a lack of government support.
Read more »
2024 Political Shifts: Reshaping South Africa and the UK in 2025This article analyzes the major political changes of 2024, focusing on the decline of the ANC in South Africa and the Labour Party's victory in the UK. It explores the implications of these shifts for governance, society, and power dynamics in both countries.
Read more »
South Africa to See Fewer Public Holidays in 2025, More Long WeekendsSouth Africa's public holiday calendar for 2025 will feature one fewer day off compared to 2024. However, there will be an increase in long weekends, offering more opportunities for extended breaks.
Read more »