South Africa’s economic growth will remain lacklustre this year, but there were tentative signs of a recovery in the global economy, Reserve Bank Governor Tito Mboweni said on Thursday. He also said that inflation remained “sticky” above the 3 to 6 percent band, largely due to higher government-set price increases and repeated that analysts and the public should not expect interest rate cuts every month.
Mboweni said here were signs that the worst of the global recession was past, and hoped to see a pick-up in growth later in the year. “Our own situation is a bit difficult but hopefully the fiscal measures that have been taken will be of assistance, particularly provided with the monetary stimulus that has been provided already,” he told analysts and reporters at a presentation of the bank’s twice-yearly monetary policy review.
The government and its utilities plan to spend 787 billion rand over the next three years on infrastructure. The central bank has also cut its repo lending rate by 350 basis points since December, by 100 basis points at each of the last three meetings. Analysts expect more rate cuts to help boost growth, with the economy seen already in its first recession in 17 years. The Reserve Bank said in the report indicators suggested the economy, and the manufacturing sector in particular, would remain under pressure “for some time”.
SOURCED FROM REUTERS