Main news this week is the announcement by the Reserve Bank to increase the repo rate by 25 basis points to 7.25 percent, effectively raising the prime lending rate to 10.5 percent. The main objective according to the Reserve Bank governor is to anchor inflationary expectations. Globally things are looking a little bit better, with lower oil prices having a positive impact on prices, but for now we will likely have to deal with higher lending rates till at least 2024. What is concerning is the SARB’s revised GDP growth estimate that has been lowered from an initial 1.1 percent for 2023 to just 0.3 percent, which means we are more than likely heading for a recession this year, given the fact that the SARB is generally more bullish in their forecasts at the start of the year.
