The South African Reserve Bank (SARB) will not increase interest rates again in 2023, an economist said on Tuesday.
A new report by PricewaterhouseCoopers (PwC) on the South Africa Economic Outlook for August 2023 states that the Reserve Bank is likely to start lowering the repo rate through 2024.
“The next step in the interest rate cycle will then most likely be a reduction in the repo rate as inflation abates further,” Lullu Krugel, PwC South Africa Chief Economist said.
“We believe this is likely to start around the middle of next year pending — as the SARB has often said — favourable data and risk developments.
“We do not anticipate interest rates to come down again to the low levels seen in 2020. Instead, it is likely that two percentage points could be shaved off towards the end of 2025. That would bring the repo rate back to pre-pandemic levels and support household spending,” Krugel explained.
