BER Comment
75bps again as growth and inflation risks pull in opposite directions
Date Uploaded: Nov 24 2022 6:45PM
At the November SARB MPC meeting, concerns (to the upside) on inflation trumped fears about the domestic growth outlook, resulting in a third consecutive policy rate hike of 75bps.
Factors limiting production – South Africa’s experience
Date Uploaded: Nov 8 2022 8:00AM
Like in almost all countries, there is a close relationship between aggregate supply and the business cycle in South Africa. However, the results of business tendency surveys (BTS) covering more than six decades indicate that the pandemic-induced lockdown
read moreLike in almost all countries, there is a close relationship between aggregate supply and the business cycle in South Africa. However, the results of business tendency surveys (BTS) covering more than six decades indicate that the pandemic-induced lockdown affected supply beyond the usual business cycle parameters. The ratio of stocks to expected demand fell to its lowest level since 1980. The shortage of materials increased to the highest level ever. The availability of skilled labour has started hampering business activity in 2021, but its restraining impact is still noticeably less than during previous upturns. Sharp increases in input costs have begun to force firms to increase selling prices at a faster pace. Although selling prices are accelerating, their tempo of increase is still below that of 2002 and significantly below those of the high inflationary 1970s and 1980s.
Revenue overrun shields public finances, for now
Date Uploaded: Oct 27 2022 6:15AM
Although the credit rating agencies should welcome the improvement in the headline fiscal ratios outlined in the MTBPS, there may also be a sense that a year or two down the line, the figures are likely to look materially different.
read moreAlthough the credit rating agencies should welcome the improvement in the headline fiscal ratios outlined in the MTBPS, there may also be a sense that a year or two down the line, the figures are likely to look materially different.
Back-to-back hikes of 75bps
Date Uploaded: Sep 22 2022 6:15PM
As widely expected, the SARB MPC announced a 75bps increase in the policy interest rate to 6.25%. The policy rate is now within striking distance of the 6.5% level at the end of 2019 before COVID-19 struck. At this stage, we expect a (final) 50bps increase in
read moreAs widely expected, the SARB MPC announced a 75bps increase in the policy interest rate to 6.25%. The policy rate is now within striking distance of the 6.5% level at the end of 2019 before COVID-19 struck. At this stage, we expect a (final) 50bps increase in November.
GDP contracts in line with expectations in 2022Q2
Date Uploaded: Sep 6 2022 4:45PM
Real GDP contracted by 0.7% q-o-q in 2022Q2, from a downwardly revised but still robust 1.7% expansion in 2022Q1. Along with gathering global storm clouds, relative to our expectation, the somewhat softer growth in the first half of the year places downside
read moreReal GDP contracted by 0.7% q-o-q in 2022Q2, from a downwardly revised but still robust 1.7% expansion in 2022Q1. Along with gathering global storm clouds, relative to our expectation, the somewhat softer growth in the first half of the year places downside risk to our July 2022 real GDP growth forecast of 2.3%. Despite this, we now expect the SARB to hike the repo rate by 75bps in September.
An aggressive hike with a hawkish statement
Date Uploaded: Jul 21 2022 6:15PM
In a split decision, and against the general expectation, the SARB MPC hiked the policy interest rate by an aggressive 75bps at its July meeting. Additional hikes totalling 100bps are expected in the cycle.
read moreIn a split decision, and against the general expectation, the SARB MPC hiked the policy interest rate by an aggressive 75bps at its July meeting. Additional hikes totalling 100bps are expected in the cycle.
Upside surprise sees real GDP back to pre-pandemic level in Q1; shocks will hurt Q2
Date Uploaded: Jun 7 2022 9:15PM
Real GDP growth handsomely outpaced expectations in 2022Q1. Despite a likely poor Q2 amid numerous shocks, this provides some comfort that growth could surpass 2% in 2022.
SARB ups the ante with a 50bps hike
Date Uploaded: May 19 2022 6:00PM
The SARB’s MPC announced a 50bps increase in the repo rate, and again flagged upside risks to the domestic inflation outlook.
A hawkish hike of 25bps that could easily have swung to 50bps
Date Uploaded: Mar 25 2022 7:15AM
The SARB MPC announced a 25bps increase in the repo policy interest rate following the March monetary policy meeting. Although a hike of 25bps was widely expected, the voting behaviour of the MPC turned decidedly more hawkish.
read moreThe SARB MPC announced a 25bps increase in the repo policy interest rate following the March monetary policy meeting. Although a hike of 25bps was widely expected, the voting behaviour of the MPC turned decidedly more hawkish.
Stress testing inflation
Date Uploaded: Mar 10 2022 1:15PM
In this note, we present the outcomes of a simplified exercise that considers the direct impact of different oil price scenarios on measured inflation.
Please ignore the version of this note sent earlier today. It has been corrected.
read moreIn this note, we present the outcomes of a simplified exercise that considers the direct impact of different oil price scenarios on measured inflation.
Please ignore the version of this note sent earlier today. It has been corrected.