Bottom Line

  • The SARB kept rates on hold with the vote unanimous in favour of the hold, matching the decision from November. This was largely expected, although the tone of Governor Kganyago’s press conference was decidedly hawkish, signalling no intent at the moment to cut rates anytime soon.
  • The SARB’s forecasts were largely unchanged compared to the November meeting, but the warnings issued regarding upside inflation risks and constraints on growth were notable.


  • The first MPC meeting for 2024 provided a largely expected outcome, with a unanimous vote to keep the Repo Rate unchanged at 8.25%. However, the tone was more hawkish than many would have expected, especially after the recent soft CPI and PPI figures.
  • In terms of the inflation outlook, the projections from the SARB were essentially unchanged from the November MPC meeting. Inflation is expected to return to the midpoint of the SARB’s target range by 2026. However, Governor Kganyago went to great lengths to emphasise the upside risks to inflation that remain present.
  • Global events such as the ongoing wars in Europe and the Middle East continue to disrupt the global supply of important commodities. These events, coupled with the high levels of inflation experienced last year, have contributed to elevated inflation expectations.
  • On the growth front, the GDP growth estimates for this year onwards were left unchanged, although the expected figure for 2023 was revised lower to 0.6% from 0.8%. The balance of risks to the medium-term growth outlook was assessed as being balanced.
  • We see more downside risk to growth going forward, and predict that the SARB may need to start cutting rates sooner than what it currently expects. Tight credit conditions will continue to have a disinflationary effect and slowing global growth will exert an even greater drag on the local economy.
read report