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BNP Paribas Raises S. Africa 2022 Avg CPI Est. to 6% From 5.2%

  • Forecast for South Africa’s average inflation in 2022 is raised on higher non-core prices exacerbated by the crisis in Ukraine* Headline inflation now looks likely to breach the 6% top of the central bank target band from April and only slow back to below 6% by 4Q
  • Inflation rate now seems likely to only fall back below the 4.5% midpoint of the target range from 2Q 2023, compared with BNP Paribas’s original expectation that it would be comfortably back toward the target by late this year
  • “While we don’t believe the SARB will respond aggressively to supply-side pressures alone, well-anchored core CPI remains critical to this view”
  • BNP Paribas maintains above-consensus call for 25 basis-points hikes at each of the five remaining policy meetings this year, followed by a cumulative 75 basis points in hikes in 2023
  • Notes the balance of risks to both the pace and size of interest-rate increases has shifted to the upside
MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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