'Expect a repo rate rise within the next year'

Economists predict the Reserve Bank will hike the rate in the second quarter of 2016.

Picture: Christa Eybers/EWN

JOHANNESBURG - Economists say the South African Reserve Bank's decision to leave the repo rate unchanged will be a temporary reprieve for consumers, but there's still a chance that the rate will rise in the second quarter of next year.

Reserve bank governor Lesetja Kganyago announced on Wednesday that there would be no movement in the rate, but warned there were a number of factors that could push inflation higher.

The announcement comes after Statistics South Africa announced a drop in inflation to 4.6% for August from 5% the previous month.

Nedbank economist Mohammad Nalla says this is nothing new.

"We have had that inflation forecast soften a little, but unfortunately whilst the peak might be a little lower in the first quarter of next year, they have pencilled it at 6.7% now instead of 6.9%, they have revised their expectations for the latter part of next year."