WATCH: SA Reserve Bank keeps interest rates unchanged
The MPC decided to keep the repurchase rate unchanged at 6.75% per year. pic.twitter.com/uhaswCa1it— SA Reserve Bank (@SAReserveBank) May 23, 2019
Headline inflation is expected to average 4.5% in 2019 (down from 4.8%), increasing to 5.1% in 2020 (down from 5.3%) and moderating to 4.6% in 2021 (down from 4.7%). pic.twitter.com/SGjH0tHNuW— SA Reserve Bank (@SAReserveBank) May 23, 2019
Kganyago said three members preferred to keep rates on hold and two members preferred a cut of 25 basis points.
Kganyago said headline inflation was expected to average 4.5 percent in 2019, down from 4.8 percent, increasing to 5.1 percent in 2020 and moderating to 4.6 percent in 2021.
He said the main drivers of the forecast are a lower starting point for food and services inflation, and the revised oil price assumptions. Food price inflation is now expected to average 3.7 percent in 2019, down from 4.1 percent.
"The near term growth outlook is limited by the larger than expected slowdown in the first quarter, weak business and consumer confidence as well as growing pressure on household disposable income," Kganyago said.
"The Committee assesses the stance of monetary policy to be broadly accommodative over the forecast period. Any future policy adjustments will continue to be data dependent."
Kganyago also said weak business confidence, possible electricity supply constraints and high debt levels in certain state-owned enterprises will continue to limit investment prospects.
Based on recent short term indicators and negative growth in mining and manufacturing, GDP is expected to contract in the first quarter of 2019. pic.twitter.com/MZ3L5rtngQ— SA Reserve Bank (@SAReserveBank) May 23, 2019
The SARB now expects GDP growth for 2019 to average 1.0% (down from 1.3% in March).— SA Reserve Bank (@SAReserveBank) May 23, 2019