Lesecha kganyago.Photo: Tebogo Letsie
Central Bank Governor Lesetya Kganyago said South Africa faces upside risks to the inflation outlook, but the latest data shows that food-driven price pressures are rising despite El Niño wreaking havoc across Africa. He said no evidence had been presented.
Data released Wednesday showed headline inflation at 5.3% year-on-year, down from 5.6% in February and slightly below analysts' expectations.
The South African Reserve Bank (SARB) said in a decision in March that headline inflation is expected to reach the midpoint of its target range of 4.5% only at the end of 2025, later than previously expected. .
“There are upside risks to the inflation outlook,” Kganyago told Reuters on the sidelines of the International Monetary Fund and World Bank Spring Meetings in Washington.
These risks were due to the rise in crude oil prices against the backdrop of intensifying tensions in the Middle East, but the global There was also the possibility that the financial situation would become tighter.
This is likely to siphon capital from emerging and developed economies and could lead to a rebalancing of exchange rates, he said.
“And we are in that category,” Kganyago said.
The South African rand has fallen more than 4% against the dollar since the beginning of the year.
Price pressures from food are in focus across the continent, with drought and severe weather wreaking havoc in much of the region. However, Mr Kganyago said the latest inflation figures showed no signs of these pressures in South Africa.
“El Niño is occurring…but the effects of El Niño are not being felt yet.”
The country, Africa's most developed country, is suffering from a sluggish economy and large debts ahead of a general election on May 29th, in which the ruling African National Congress will be elected to parliament for the first time since the end of apartheid 30 years ago. may lose a majority of
Asked about election uncertainty, Kganyago said it was a global phenomenon, with a record number of countries holding elections around the world.
“That's what you're facing. That uncertainty shows up in the foreign exchange market, it shows up in the bond market, it shows up in the stock market.”
