South Africa’s central bank statement says it sees upside risks to inflation; sees downside risks to growth

FORECASTS: Growth forecasts have been marked down, while inflation forecasts were revised higher 2026 CPI is seen at 4.4% (vs prev. 3.7%), while 2027 CPI is seen at 3.7% (vs prev 3.3%). 2026 core CPI is seen at 3.7% (vs prev. 3.3%), while 2027 core CPI is seen at 3.7% (vs prev. 3.3%). 2026 GDP growth is seen at 1.2% (vs prev. 1.4%), while 2027 GDP growth is seen at 1.7% (vs prev. 1.9%). 2026 fuel inflation is seen at 15.6% (vs prev. 7.4%). STATEMENT Projections entail some second-round effects, though there is no clear confirmation of these effects in the data. The statement says three scenarios imply higher inflation and lower growth, and all show some monetary policy tightening. Three scenarios imply higher inflation and lower growth, and all show some monetary policy tightening. Longer strait closure has inflation at 5%, with two more rate hikes, while the most adverse scenario has three rate hikes.