Governor Kganyago: Power cuts & high inflation still threat to the economy

Load shedding, high inflation and a local currency still under pressure are just some of the factors cited by South African Reserve Bank Governor Lesetja Kganyago as imminent threats to the economy.

The governor listed these factors on Thursday afternoon before announcing that the repo rate was being increased by 50 basis points to 8.25%.

Since the COVID-19 pandemic, when rates were lowered to 3.75%, the repo rate has climbed 450 basis points.

This is a blow to those with bonds and high credit, who have seen the repo rate climb above pre-COVID-19 levels.

With increased load shedding, South Africa has seen GDP growth disintegrate and while paying more for their debt, the economy and income aren’t growing.

Governor Lesetja Kganyago said that the forecast for growth was slightly higher than in March but there were problems.

“The bank’s forecast for GDP growth is slightly higher at 0.3%. Energy and logistical constraints remain binding on South Africa’s growth outlook.”

He said that it was estimated that load shedding alone had taken two percentage points from growth this year.

“Load shedding may additionally have broader price effects on the cost of doing business and the cost of living.”

Cash-strapped South Africans are now looking at ways to stay afloat.

-EWN

In other news – Actress Manaka Ranaka gives detailed update on her sister, Dineo’s situation

Generations: The Legacy actress, Manaka Ranaka gave an update on her sister Dineo’s situation, saying she is not yet well. A few days ago, Dineo Ranaka took to Instagram to express how much she had struggled with life issues.

She even went on to say that she felt like committing suicide, leaving many of her fans in shock. Manaka had spoken solid words to her sister in the past hours, encouraging her to be strong. Learn More