Kganyago: Load shedding significantly impacting the economy & inflation

Governor of the South African Reserve Bank (Sarb) Lesetja Kganyago said the impact of load shedding on economic activity has been quite significant.

On Wednesday, the central bank’s governor briefed Parliament’s Standing Committee on Finance about Sarb’s annual report and gave an overview of the country’s economy.

He said load shedding also poses a risk to the country’s inflation outlook.

“The impact on both the primary and secondary sectors has actually been much more pronounced and there’s also the fact that load shedding actually poses a risk to the inflation outlook.”

Kganyago said while they expect inflation to return to the bank’s preferred midpoint, there is no room for complacency.

Last week, Statistics South Africa (Stats SA) released data showing that inflation slumped to 4.7% in July – the lowest level in two years.

Kganyago also said the poorest suffer the most, with vulnerable groups like pensioners experiencing higher inflation.

“Their inflation is way above target.”

While prices remain high due to inflation, Kganyago said households have been able to absorb these high debt service costs.

-EWN

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