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GS See Higher Inflation, Lower GDP vs. SARB Forecast

SARB
  • The SARB 75bps resulted in a split 3-2 vote (with 2 dissents in favour of 100bp). This follows from a split 1-3-1 vote for 50-75-100bp in July, and thus represents an incremental hawkish policy shift.
  • We expect a 50bp rate hike in November to a terminal 6.75% policy rate, but our more hawkish near-term inflation outlook than the SARB's implies risks of a larger hike in November and/or subsequent hikes in early 2023.
  • Our near-term inflation forecasts continue to stand above the SARB’s (7.6% for Q3 22 vs. SARB 7.4% and 7.2% for Q4 22 vs. SARB 6.6%), largely on account of more concerns over supply-side risks (namely food prices) and a weaker Rand starting point assumption. Meanwhile, our growth forecast for 2023 is notably weaker than the SARB's (GS 1.1% vs. SARB 1.9%).
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  • The SARB 75bps resulted in a split 3-2 vote (with 2 dissents in favour of 100bp). This follows from a split 1-3-1 vote for 50-75-100bp in July, and thus represents an incremental hawkish policy shift.
  • We expect a 50bp rate hike in November to a terminal 6.75% policy rate, but our more hawkish near-term inflation outlook than the SARB's implies risks of a larger hike in November and/or subsequent hikes in early 2023.
  • Our near-term inflation forecasts continue to stand above the SARB’s (7.6% for Q3 22 vs. SARB 7.4% and 7.2% for Q4 22 vs. SARB 6.6%), largely on account of more concerns over supply-side risks (namely food prices) and a weaker Rand starting point assumption. Meanwhile, our growth forecast for 2023 is notably weaker than the SARB's (GS 1.1% vs. SARB 1.9%).