'There are still a number of challenges facing SA's economy'
Reserve Bank Governor Kganyago has announced that the repo rate will remain unchanged at 7 percent.
JOHANNESBURG - Reserve Bank Governor Lesetja Kganyago says growth for 2016 is now forecast at zero percent.
Earlier this afternoon, Kganyago announced that the repo rate will remain unchanged at seven percent, but says there are still a number of challenges facing the economy.
Kganyago says growth this year got off to a slow start.
"The domestic growth outlook remain extremely challenging following the contraction in gross domestic product (GDP) in the first quarter of this year."
He adds the economy has struggled to recover.
"Although this is anticipated to have been the low point of the circle, the recovery is expected to be weak."
#Rates Reserve Bank Governor Lesetja Kganyago says inflation is still a concern, but should improve in the long term. RW— EWN Reporter (@ewnreporter) July 21, 2016
Kganyago says job creation will continue to battle if growth remains low.
"These trends have contributed to the persistence of high rates of unemployment in the economy."
But he says South Africa is not alone in battling to expand the economy as global growth remains subdued.
BUT... THERE'S GOOD NEWS FOR MOTORISTS
At the same time, Kganyago says there should be good news for motorists next month with a substantial drop in fuel prices expected.
He says a combination of factors has contributed to an over-recovery and this is good news at the pumps.
"The recent appreciation of the rand, coupled with a lower average oil price, has resulted in a substantial over-recovery in the petrol price and a sizeable reduction in retain prices is expected in August."