South Africa Interest Rate

The South African Reserve Bank cut its key interest rate by another 25 basis points to 7.50% on January 30th, 2025, as anticipated, marking the third successive reduction. While inflation remained well-contained, the central bank noted that the medium-term outlook was more uncertain than usual. Inflation is expected to remain in the bottom half of the target range during the first half of this year, but the medium-term projections are closer to 4.5%, with upside risks, especially from global factors. The 2025 inflation forecast was revised down to 3.9% from 4%, while the estimates for 2026 and 2027 were kept steady at 4.6% and 4.5%, respectively. Meanwhile, South Africa’s economy is expected to rebound in the fourth quarter after a third-quarter slowdown, largely due to an unusually sharp decline in agricultural production. Over the next few years, growth is projected to rise steadily, reaching 2% by 2027.