Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    SweetCrudeReportsSweetCrudeReports
    Subscribe
    • Home
    • Oil
    • Gas
    • Power
    • Solid Minerals
    • Labour
    • Financing
    • Freight
    • Community Development
    • E-Editions
    SweetCrudeReportsSweetCrudeReports
    Home » South Africa trims rate hikes as power cuts slash growth prospects

    South Africa trims rate hikes as power cuts slash growth prospects

    January 27, 2023
    Share
    Facebook Twitter LinkedIn WhatsApp
    *South Africa’s central bank governor, Lesetja Kganyago, arrives to deliver a keynote address on monetary policy, growth and jobs at the University of the Witwatersrand in Johannesburg, South Africa, November 1, 2022. REUTERS/Siphiwe Sibeko

    Johannesburg — South Africa’s rolling power cuts are expected to wipe as much as 2 percentage points off economic growth this year, the central bank said on Thursday as it raised interest rates by just 25 basis points.

    The increase to 7.25% (ZAREPO=ECI) was smaller than the 50-bp hike expected by the majority of economists polled by Reuters and followed three 75-bp hikes in a row as the bank tried to pull inflation back from a 13-year peak struck in the middle of 2022.

    The South African Reserve Bank struck a gloomy tone on the country’s economic prospects, saying growth of just 0.3% was expected this year and 0.7% in 2024. That compares to November growth projections of 1.1% in 2023 and 1.4% next year.

    The smaller hike this time suggests bank could be coming to the tail-end of a tightening cycle that started in November 2021, although Governor Lesetja Kganyago used a news conference to stress the bank “meant business” about lowering inflation.

    Three members of the Monetary Policy Committee preferred the 25-bp increase, while two wanted a 50-bp increase, Kganyago said.

    “While economic growth has been volatile for some time, prospects for growth appear even more uncertain than normal. A material reduction in load-shedding (power cuts) would significantly raise growth,” the governor added.

    Kay Walsh, managing director at Nova Economics, a consulting firm commissioned by Eskom to calculate the economic cost of power cuts, has estimated 22 billion rand ($1.3 billion) of output was lost in 2022 because of the outages, which reached record levels last year.

    The SARB now sees consumer inflation of 5.4% in 2023 and 4.8% in 2024, compared with November’s forecasts of 5.4% and 4.5% respectively. Inflation dipped to 7.2% in annual terms in December from 7.4% the previous month, above the bank’s 3%-6% target range.

    Inflation is expected to sustainably fall to the midpoint of its target range by the fourth quarter of 2024, the bank said.

    *Bhargav Acharya, Kopano Gumbi & Alexander Winning; Editing: James Macharia Chege, Olivia Kumwenda-Mtambo & Nick Macfie – Reuters

    Follow us on twitter

    Related News

    Afreximbank reaffirms financial resilience and transparency

    Kwairanga reiterates NGX’s commitment to deepening Nigeria’s capital market

    African Union agency says Fitch’s downgrade of Afreximbank is ‘flawed’

    E-book
    Resilience Exhibition

    Latest News

    Oil up 1% at 7-week high on hopes of positive US-China trade talks

    June 10, 2025

    EU’s new Russia sanctions to target energy sector and banks

    June 10, 2025

    ADNOC Gas takes FID and awards $5b contracts for RGD project

    June 10, 2025

    ‘Nigeria’s $5bn oil-backed loan from Aramco delayed by oil price drop’

    June 10, 2025

    Shipping firms dodge $900m cost, as Nigeria hit by empty container glut

    June 10, 2025
    Demo
    Facebook X (Twitter) Instagram
    • Opec Daily Basket
    • Oil
    • Power
    • Gas
    • Freight
    • Financing
    • Labour
    • Technology
    • Solid Mineral
    • Conferences/Seminars
    • Community Development
    • Nigerian Content Initiative
    • Niger-Delta Question
    • Insurance
    • Other News
    • Focus
    • Feedback
    • Hanging Out With Markson

    Subscribe for Updates

    Get the latest energy news from Sweetcrudereports.

    Please wait...
    Please enter all required fields Click to hide
    Correct invalid entries Click to hide
    © 2025 Sweetcrudereports.
    • About Us
    • Advertise with us
    • Privacy Policy

    Type above and press Enter to search. Press Esc to cancel.