South African Reserve Banks worried about inflation

The Reserve Bank has painted a dim outlook for the economy, warning that there is a high probability of global growth and financial shocks that may affect South Africa.

SARB’s head of research and monetary policy committee member Rashad Cassim reiterates the Bank’s view that rising inflation and a volatile rand are among the main challenges for monetary policy authorities.

Inflation as measured by the consumer price index (CPI) quickened to 5.9% year on year in February from 5.4% year on year in January.

Cassim addressed the Reuters economist of the year awards on Tuesday‚ won by Industrial Development Corporation (IDC) senior economist Nico Kelder. The awards recognise economists whose forecasts were closest to actual economic data for last year.

Cassim said the MPC considered several global and local economic dynamics during their meetings‚ including inflation trends‚ oil prices‚ exchange rate‚ unemployment‚ and lending patterns in the economy - all of which required a lot of research and analysis‚ he said.

He urged economic analysts to maintain reliability and consistency.

Best gross domestic product (GDP) forecaster award went to Meganomics economist Colen Garrow‚ best CPI forecaster was awarded to Investec SA chief economist Annabel Bishop‚ while the best rand/dollar exchange rate forecaster award went to Nedbank senior economist Dennis Dykes.

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