The bank cut its GDP growth forecast to 0.4% for 2019 (from 0.5%) thanks largely to electricity supply constraints.
The forecasts for 2020 and 2021 have also been lowered, to 1.2% (from 1.4%) and 1.6% (from 1.7%), respectively.
Electricity supply constraints will likely keep economic activity muted in the near term, Kganyago said in the MPC statement.
The bank revised its inflation forecast “significantly lower” from its last meeting in November. The Bank now expects inflation to average 4.1% in 2019 (from 4.2%), 4.7% in 2020 (from 5.1%) and 4.6% for 2021 (from 4.7%).
SA’s economy continues to flag amid rolling blackouts instituted by Eskom, which began again in December. The shortages have weighed on expectations for growth and the bank has joined institutions such as the World Bank in cutting growth forecasts.
-BusinessLIVE