South African Reserve Bank Revised GDP Forecast

South African Reserve Bank Revised GDP ForecastThe GDP forecast for South African economy was revised down for 2015 and 2016; however it remained unaltered for 2017. Property market is also expected to be indecisive as the industry warns of an unsteady housing market.

The Monetary Policy Committee of the South African Reserve Bank's has decided to boost the repo rate by twenty five basis points to 6.25%. The prime lending rate is 9.75 percent.  Two among the policy committee members favored the unchanged standpoint.

Lesetja Kganyago, Governer of the South African central bank said risks to the prediction have increased the disadvantage, and mainly result from long lingering drought, depreciation of the rand and the prospects of elevated tariffs for electricity.

According to him, the economy continues to be weak, in spite of an improved performance in the manufacturing sector. However, the agricultural and the mining sectors seem to have contracted even more in the third quarter.

The outlook for emerging markets (EMs) remains challenging. Kganyago said the US Federal Reserve is likely to raise rates in December, which is expected to induce further volatility within EMs in the lead up.

In the third quarter, the rate of unemployed remained up to 25.5 percent. In September, the retail sale numbers were up by 2.7 percent year-on-year. However, the month-on-month sales went down by 1.9percent.