Below are comments from South African Reserve Bank (SARB) Governor Lesetja Kganyago on Thursday as he announced the central bank’s latest decision on its benchmark repo rate.
“The medium-term inflation outlook is largely unchanged.
“Electricity, food and fuel price inflation continue to shape the near and medium-term trajectory of headline inflation.”
“In the second quarter of this year, South Africa’s GDP rebounded from the contraction experienced in the first quarter, but economic activity levels still remain weak.
“While global growth remains resilient, recent indicators on trade and manufacturing have deteriorated and a range of downside risks to growth remain.
“Based on recent short term economic indicators for the mining and manufacturing sectors, the third quarter GDP outcome is expected to be muted.”
“The QPM (Quarterly Projection Model) assesses the rand to remain slightly undervalued. While the rand has benefited from improvements in global sentiment, investors remain concerned about domestic growth prospects and fiscal risks.”