South Africa’s inflation expectations dipped for the next two years, providing the central bank with positive news ahead of its policy meeting next week.
South Africa’s average inflation expectations for 2024 fell to 5.4% in the first quarter of 2024, from 5.7% previously, according to a survey released on Tuesday by the Stellenbosch-based Bureau for Economic Research,
The rate of price growth for 2025 is now seen downward spiralling to 5.3% from 5.6% and to 5.2% in 2026, according to analysts.
Though experts generally expect it to steady interest rates at 8.25% when it meets on March 27, the survey results will inform the policy debate at the South African Reserve Bank when it meets next week,
The Reserve Bank aims to keep inflation expectations at the 4.5% midpoint of its 3% to 6% target range as the headline inflation rate and expectations have been above that level since 2021.
The South African Reserve Bank Governor, Lesetja Kganyago said that only when inflation is on a downward trajectory toward the midpoint will the Monetary Policy Committee loosen its monetary policy.
Kganyago added that the task of taming inflation is not yet done, adding that until that is done, there will not be a change in the monetary stance.”
