Reserve Bank forecasts higher growth

2 April 2012

South Africa’s economy is expected to grow by 3 percent in 2012 – higher than previously forecast – on the back of a favourable global outlook, says Reserve Bank governor Gill Marcus.

The Reserve Bank’s earlier forecast was for a 2.8 percent growth in 2012.

The Bank also changed its growth forecast for 2013, expecting the economy to grow at 3.9 percent from an earlier forecast 3.8 percent.

Marcus delivered the Bank’s monetary policy committee (MPC) statement in Pretoria on Thursday.

Marcus said the outlook for the country’s mining sector continued to disappoint, while the recovery in the manufacturing sector was expected to continue.

Trends in gross fixed cap formation were also encouraging, Marcus said.

South Africa’s interest rate was cut by 50 basis points to 5.5 percent in November 2010. The MPC left the rate unchanged at every meeting in 2011. The Bank also left rates unchanged at its January 2012 meeting.

Sapa