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Sarb revises growth outlook to 1.1%

Central bank Governor Lesetja Kganyago says despite growth remaining subdued there are a number of positive factors influencing the economy.

FILE: Reserve Bank Governor Lesetja Kganyago. Picture: Renart Toerien/EWN.

JOHANNESBURG – The Reserve Bank Governor Lesetja Kganyago says the bank has revised the country's growth outlook to 1.1%, as the overall outlook remains weak.

He has announced that the repo rate will remain unchanged at 7%.

However, he says despite growth remaining subdued there are a number of positive factors influencing the economy.

Kganyago says growth for this year has been adjusted slightly.

“The forecast for 2017 has been revised down marginally, to 1.1% from 1.2% and remains unchanged at 1.6% for 2018.”

He says this is an improvement from last year.

“The bank expects growth to have averaged 0,4% in 2016, although recent monthly data for the fourth quarter suggests that there may be a downside risk to this forecast.”

However, he says the strong rainfall has assisted agriculture, and inflation looks set to decrease.

Added to this, the governor says the rand has also strengthened substantially and the cycle of hiking the repo rate appears to be at an end.

WATCH: Reserve Bank hopeful for changes to leaked Absa report

At the same time, ratings agency Standard & Poor’s Global is warning that if political tensions continue to escalate, it could derail government efforts to improve policy implementation, hampering economic growth.

However, it says it sees the country's economic growth quickening to 1.4% this year.

(Edited by Masechaba Sefularo)