Latest news with #BureauForEconomicResearch
The Herald
15 hours ago
- Business
- The Herald
Inflation expectations drop sharply in quarterly survey
The SARB, which commissions the survey, takes inflation expectations into account when taking its monetary policy decisions. 'The second-quarter survey reflects a broad-based and significant decline in the inflation expectations ... This decline was present among all three social groups and for the entire forecast horizon,' the Bureau for Economic Research, which conducts the survey, said in a report. The SARB targets inflation of 3%-6% but has been pushing to lower the target. Its preference is for a 3% objective, it said at its last policy meeting in May, when it cut its key lending rate by 25 basis points to 7.25%. Consumer inflation was 2.8% year on year in May , the third month in a row it has been below 3%. The SARB's next monetary policy announcement is scheduled for July 31. The survey also showed analysts, business people and trade unions had become more pessimistic about economic growth, on average expecting growth of 0.9% this year whereas they had predicted growth of 1.2% in the last survey. Africa's biggest economy expanded just 0.1% in the first quarter of 2025, dragged down by a poor performance by its mining and manufacturing sectors. Reuters
Zawya
2 days ago
- Business
- Zawya
South African inflation expectations drop sharply in quarterly survey
South African analysts, business people and trade unions lowered their inflation expectations in the latest survey published on Wednesday, which could embolden the central bank to keep cutting interest rates. The average forecast for consumer inflation during 2025 fell to 3.9% in the second-quarter survey from 4.4% in the previous quarter, the first time in more than four years that the current year's forecast has been below 4%. For 2026, the average dropped to 4.3% from 4.6% in the first quarter, and for 2027 it fell to 4.5% from 4.7%. The South African Reserve Bank, or SARB, which commissions the survey, takes inflation expectations into account when taking its monetary policy decisions. "The second-quarter survey reflects a broad-based and significant decline in the inflation expectations. ... This decline was present among all three social groups and for the entire forecast horizon," the Bureau for Economic Research, which conducts the survey, said in a report. The SARB targets inflation of 3%-6% but has been pushing to lower the target. Its preference is for a 3% objective, it said at its last policy meeting in May, when it cut its key lending rate by 25 basis points to 7.25%. Consumer inflation was 2.8% year-on-year in May , the third month in a row it has been below 3%. The SARB's next monetary policy announcement is scheduled for July 31. The survey also showed analysts, business people and trade unions had become more pessimistic about economic growth, on average expecting growth of 0.9% this year whereas they had predicted growth of 1.2% in the last survey. Africa's biggest economy expanded just 0.1% in the first quarter of 2025, dragged down by a poor performance by its mining and manufacturing sectors. (Reporting by Sfundo Parakozov; Editing by Alexander Winning and Barbara Lewis)
Reuters
2 days ago
- Business
- Reuters
South African inflation expectations drop sharply in quarterly survey
JOHANNESBURG, July 2 (Reuters) - South African analysts, business people and trade unions lowered their inflation expectations in the latest survey published on Wednesday, which could embolden the central bank to keep cutting interest rates. The average forecast for consumer inflation during 2025 fell to 3.9% in the second-quarter survey from 4.4% in the previous quarter, the first time in more than four years that the current year's forecast has been below 4%. For 2026, the average dropped to 4.3% from 4.6% in the first quarter, and for 2027 it fell to 4.5% from 4.7%. The South African Reserve Bank, or SARB, which commissions the survey, takes inflation expectations into account when taking its monetary policy decisions. "The second-quarter survey reflects a broad-based and significant decline in the inflation expectations. ... This decline was present among all three social groups and for the entire forecast horizon," the Bureau for Economic Research, which conducts the survey, said in a report. The SARB targets inflation of 3%-6% but has been pushing to lower the target. Its preference is for a 3% objective, it said at its last policy meeting in May, when it cut its key lending rate by 25 basis points to 7.25% (ZAREPO=ECI), opens new tab. Consumer inflation was 2.8% year-on-year in May (ZACPIY=ECI), opens new tab, the third month in a row it has been below 3%. The SARB's next monetary policy announcement is scheduled for July 31. The survey also showed analysts, business people and trade unions had become more pessimistic about economic growth, on average expecting growth of 0.9% this year whereas they had predicted growth of 1.2% in the last survey. Africa's biggest economy expanded just 0.1% in the first quarter of 2025, dragged down by a poor performance by its mining and manufacturing sectors.
News24
2 days ago
- Business
- News24
Inflation expectations drop to near four-year low, creates room for rate cut this month
• For more financial news, go to the News24 Business front page. South African inflation expectations fell to an almost four-year low, providing policymakers with another reason to press ahead with their easing cycle. Average inflation expectations two years ahead — which the central bank's monetary policy committee uses to inform its decision-making — slipped to 4.5% in the second quarter from 4.7% previously, according to a survey released on Wednesday by the Stellenbosch-based Bureau for Economic Research. The MPC prefers to anchor inflation expectations at the 4.5% midpoint of its target band, and is in talks with the National Treasury to adjust the goal to 3%. The data combined with low inflation bolsters the case for the panel to again cut the key interest rate by 25 basis points to 7% when it delivers its next decision. Forward-rate agreements, used to speculate on borrowing costs, are pricing in 18 basis points of cuts at the July 31 meeting, or a 72% chance of a 25-basis-point reduction. The contracts are pricing in a further 14 basis points of cuts in the remainder of the year, implying a 56% chance of a second 25-point reduction. Governor Lesetja Kganyago said Tuesday that South Africa's inflation rate that's been hovering near or below the floor of the MPC's 3%-to-6% target range for eight consecutive months is creating 'opportunistic disinflation' that will help policymakers to anchor price expectations at a lower level. Kganyago is comfortable with the trajectory of South African inflation, though he said the outlook remains clouded by uncertainty stemming from geopolitical tensions, including US President Donald Trump's trade war. These risks warrant the central bank's current policy stance, which he characterised as still restrictive while being fairly close to a neutral setting that neither heats nor cools the economy.
Bloomberg
2 days ago
- Business
- Bloomberg
South Africa Inflation Expectations Drop to Near Four-Year Low
South African inflation expectations fell to an almost four-year low, providing policymakers with another reason to press ahead with their easing cycle. Average inflation expectations two years ahead — which the central bank's monetary policy committee uses to inform its decision-making — slipped to 4.5% in the second quarter from 4.7% previously, according to a survey released on Wednesday by the Stellenbosch-based Bureau for Economic Research.
