The deputy governor of the country’s central bank paints a bleak picture of South Africa’s economy.
South Africa is currently experiencing the lowest growth episode in its modern history, and the country’s growth outlook could see living standards slip even further, says Rashad Cassim, the deputy governor of the South African Reserve Bank .
“Externally, we have been buffeted by a series of extraordinary shocks: the Covid-19 pandemic, the war in Ukraine, and a global inflation surge,” he said. This figure was three times worse than the market consensus, which predicted a contraction of 0.4% for the period. “We know electricity shortages have intensified; we expect to have 250 days of load-shedding this year, from 157 days last year and 48 days in 2021.”
SARB now anticipates inflation to be back within the midpoint of its target range towards the end of this year. The International Monetary Fund has made similar predictions.The Bureau for Economic Research has registered expectations that paint a bleaker outlook for inflation at 6.1% for 2023, up from 5.9% and 5.6%, up from 5.3%.
“There is a global dynamic to elevated food price inflation, but now we are also worrying about load-shedding driving up food prices, as electricity shortages start to disrupt the production and storage of food,” Cassim said.
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