Online Reporter
South Africa’s economic outlook is better this year than last, but the inflation picture is more muddied as risks abound, its central bank governor said on Tuesday.
South African Reserve Bank (SARB) Governor Lesetja Kganyago told Reuters in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland, that growth in Africa’s most industrialised economy could be close to 2 percent in 2025, versus the 1,1 percent growth projected for 2024.
“Depending on who is forecasting, growth varies between 1,6 percent and 2 percent (this year). We think … it would be closer to 2 percent than closer to 1,6 percent,” he told the Reuters Global Markets Forum.
Kganyago cited the formation of a broad coalition government last year as one of the key enablers of faster growth.
“The structural reform agenda has gained momentum, and it has been given impetus by this Government of National Unity with a very clear focus on taking South Africa’s economic trajectory to the next level,” he said.
The coalition that emerged after the long-ruling African National Congress lost its parliamentary majority includes the business-friendly Democratic Alliance and a host of other smaller parties from across the political spectrum.
Investors are optimistic that reforms in key sectors such as electricity, freight rail and the visa system will accelerate and lift the annual growth rate beyond the meagre 1 percent it has averaged over the past decade.
Kganyago warned that South Africa’s inflation outlook could be muddied by factors including protectionist policies with the return of Trump to the White House. — Reuters.
