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Goldman Sachs See Risk of Later Start to Rate Cuts Than March 2024 Baseline

SOUTH AFRICA
  • With the renewed food price shock, Goldman Sachs raise their inflation forecast for 2024 from 4.1% to 4.4% (and their 2023 forecast from 5.8% to 5.9%).
  • Food inflation on their projections will now likely remain above the SARB’s 3-6% target range until Q4 2024, implying a somewhat more back-loaded headline disinflation process over the course of the year. They nonetheless still expect headline inflation to fall back to the 4.5% target mid-point by March, and forecast a core inflation target undershoot by Q2.
  • With the somewhat less benign inflation outlook, however, Goldman Sachs see risks of a later start to the rate-cutting cycle than their baseline for the first cut in March 2024.

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