Economy

Old Mutual Wealth expects the SARB to increase rates by 25 basis points at all its MPC meetings in 2022

The SA Reserve Bank’s Monetary Policy Committee faces rising inflation on the one hand with recent further gains in oil prices risking a breach of the upper end of its inflation target. On the other hand, the economy is still quite weak. Employment is far from recovering, unlike in the US and elsewhere. Also unlike the US, there is little evidence of demand-led inflation. Inflation pressures instead stem largely from exogenous factors – global fuel and food prices and regulated utility tariffs.

No power, no growth

South Africa looks set to deliver a lacklustre 2% GDP growth in 2022 as businesses and consumers face a long list of economic headwinds. In its 2022 economic outlook presentation, Nedbank CIB singled out domestic electricity supply constraints; the knock-on effect of continuing global responses to pandemic; and the topping-off of the commodity price cycle and resulting decline in net exports as reasons why we have no chance of repeating the 5% GDP growth pencilled in for full-year 2021. Last year’s outperformance was fuelled by surging commodity prices and an up-tick in global economic activity as lockdown restrictions were eased.

South Africa Economic Outlook: A challenging time for consumers

This document reports on PwC South Africa’s core macroeconomic forecasts for the country as of 24 January 2022, based on different forward looking scenarios.

SARB to keep hiking rates as price pressures persist