BUSINESS MAVERICK: SARB’s MPC is likely to cut rates further this week as economy crumbles

Consumer inflation in South Africa is currently at 2.1%, a 15-year low which is well below the 3% to 6% range that the South African Reserve Bank is mandated to target. That would normally be a cause for celebration. Inflation can have a corrosive effect on an economy, eroding household savings, raising business costs and adding an unwanted layer of uncertainty to longer-range investment plans.

The economy during the second quarter of 2020 may have cratered as much as 30% or more after tanking 2% in Q1, unemployment has soared beyond the 30% level it was last pegged at and hunger is on the rise even as inflation slows. The main cause, of course, is the Covid-19 pandemic and the often questionable measures the government has implemented to contain its spread.

The case for cutting is supported by economist expectations that the SARB likely now sees a bigger GDP contraction in 2020 than the 7% it previously forecast.

Australia Australia Latest News, Australia Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

BUSINESS MAVERICK OP-ED: Little tax room to manoeuvre as Covid-19 pandemic triggers bleaker contractionSouth Africa’s growth outlook for 2020/2021 was bleak even before the Covid-19 pandemic. Now, with the contraction triggered by the pandemic, there is expected to be, at least, a 7.2% contraction in the South African economy, with widespread losses of jobs and livelihoods, food insecurity and business insolvencies – and a shrinking tax base.
Source: dailymaverick - 🏆 3. / 84 Read more »

Mboweni’s tweet could endanger SAA business rescue proceedings | CitypressA late-night tweet from Finance Minister Tito Mboweni could spell trouble for plans to implement SAA’s rescue plan this week and end the stricken airline’s business rescue proceedings, writes Antoinette Slabbert
Source: City_Press - 🏆 7. / 72 Read more »