BNP Paribas South Africa has released the following economic commentary by Jeff Schultz, Senior Economist, BNP Paribas South Africa.

KEY MESSAGES

We have added another 25bp hike to South Africa’s 2021 policy rate profile.
We expect the South African Reserve Bank (SARB) to tee up a gradual normalisation cycle at its July MPC meeting, hiking in both September and November and taking the end-2021 repo rate to 4.00%.
Stickier non-core prices in H2, a possible lowering of the inflation target in 2022 and our view that the central bank’s output gap assumptions should gradually narrow, underpins our forecast tweak.
With CPI set to slow below the SARB’s current implicit 4.5% target midpoint from Q2 2022, we see the policy rate ending 2022 at 4.75%, still below the pre-pandemic level.

Download the full research note below…

ENDS