The South African Reserve Bank is keeping repo rates at 6.5%.
According to SARB they expect inflation to peak at 5.7% in the first half of 2019, and to then drop to 5.3% by the end of 2020. They’re also expecting higher oil prices to make petrol go up, though at least food inflation hasn’t struck too badly – yet.
Domestic growth this last quarter was weaker than expected, so expected GDP growth for 2018 has dropped to 1.2%, rather than the previous estimate of 1.7%.
and the rand has weakened by about 7% against the dollar since the monetary policy committee met in May.
Things are getting more expensive, the economy looks bad, and so does the petrol price but at least SARB hasn’t hiked your debt.
We need about 5% growth to start making inroads into unemployment, and that is just not happening.
Part of the whole problem is essentially Donald Trump being president in America.
Higher international oil prices will contribute to petrol price inflation in 2018. The impact on headline inflation is somewhat moderated by lower food price inflation. pic.twitter.com/vNeG0lk61D
— SA Reserve Bank (@SAReserveBank) July 19, 2018
That higher oil price relates pretty directly to Trump’s stance on Iran, which is one of the world’s major oil suppliers.
Higher oil prices also tend to hurt the world economy. Just prior to the previous world economic crash the oil price was on a perpetual rise – mainly because of GW Bush’s various adventures in the Middle East destabilising the region.
But we can’t just chalk this up to outside influences – we’re currently still operating on Malusi Gigaba’s budget, which was drafted when Jacob Zuma was still president.
Right now we need to start considering that Zuma was an economic disaster, and we need to reconsider a lot of his policy. The status quo is just not working, and a lot of the status quo was Zuma lifting up his hands and essentially blaming the world economy for our plight.
We’ve got to consider how we’re going to get off of oil and onto alternatives that we as a country produce, so that we’re not as vulnerable to America’s blundering on the world stage.
At this point, we need to take Franklin Delano Roosevelt’s advice, “Do something. If it works, do more of it. If it doesn’t, do something else.”