It has been a challenging year for the Republic of South Africa (RSA), and it looks set to become more challenging still. Relations with the US have taken a very clear nosedive since President Trump took office in January, and now the application of a 30% tariff on most South African goods entering the US market is set to compound an already rocky economic picture.
Monetary Policy
The South African Reserve Bank (SARB) cut the benchmark rate by 25bps on 31st July, taking it to 7.00% - the lowest rate since November 2022. Whilst the decision was unanimous amongst the Monetary Policy Committee, but they also forecast reduced GDP growth down from 1.2% to 1% citing significantly slowing economic activity in Q1 ’25 (real GDP only increased by 0.1%), and the threat of higher US tariffs. Indeed, six out of eight industries surveyed by the RSA’s statistics department reported contraction, with only personal services and construction showing growth. This means that total business revenues decrea...
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