The Monetary Policy Committee (MPC) has decided to keep the policy rate unchanged, at 7%.
Governor Lesedi Kganyago, said on Thursday afternoon, headline inflation, has picked up in recent months, despite pressure from meat and vegetables, as well as fuel prices, which have been declining at a snail’s pace.
He also said inflation is expected to rise to 4% in the coming months, but revert to around 3,6% in 2026.
The SARB forecast included the higher electricity price inflation, of nearly 8% than 6%, due to NERSA’s corrective pricing.
He also said South Africa’s GDP was surprisingly stronger last quarter, which facilitated a revision of the growth forecast, to 1,2%, from 0.9%.
Interest rates were cut by 125 basis points, since September last year.
The global economy is resilient, with a longer term interest rates rise in major economies, despite high tariffs and a tense geopolitical climate.