Global trade tensions and a potential value-added tax hike in South Africa could derail two years of slowing inflation, the country’s central bank governor said on Tuesday.<\/p>\n
Speaking on the sidelines of a meeting of G20 finance officials in Cape Town, Lesetja Kganyago said uncertain trade conditions and retaliatory tariffs could impact South Africa by tightening global financing conditions and affecting its exports.<\/p>\n
South Africa’s G20 presidency has been overshadowed by the prospect of a global trade war since U.S. President Donald Trump’s return to the White House last month.<\/p>\n
Japan’s finance minister\u00a0has pulled out of this week’s G20 finance meeting to focus on trying to pass next year’s budget, while U.S. Treasury Secretary Scott Bessent is\u00a0staying away\u00a0amid a spat between Trump’s administration and South Africa.<\/p>\n
“One thing looming large is elevated uncertainty by some of the trade measures taken by major economies,” Kganyago told Reuters in an interview.<\/p>\n
“A combination of those could feed into the domestic price formation process and create a challenge for us where you have both a slowing global economy and a rising inflation profile at the same time,” he added.<\/p>\n
Annual consumer inflation\u00a0rose for the second month in a row in December, reaching 3.0%, but it remains at the bottom end of the South African Reserve Bank’s target band of 3%-6%.<\/p>\n
The bank began cutting interest rates in September last year and has implemented three 25-basis-point cuts\u00a0to date. But some analysts believe it may pause its cutting cycle soon due to a deterioration in the global economic backdrop and emerging domestic risks.<\/p>\n
Last week South Africa’s national budget was postponed for the first time in its post-apartheid history after a\u00a0last-minute disagreement\u00a0in the ruling coalition over a proposal to raise VAT by 2 percentage points to 17%.<\/p>\n
Finance Minister Enoch Godongwana is expected to present a new budget on March 12 without the VAT increase.<\/p>\n
Kganyago called the proposal to raise VAT a “self-inflicted shock,” adding that if it were implemented the central bank would respond to the second-round effects on inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"
Global trade tensions and a potential value-added tax hike in South Africa could derail two years of slowing inflation, the country’s central bank governor said on Tuesday. Speaking on the sidelines of a meeting of G20 finance officials in Cape Town, Lesetja Kganyago said uncertain trade conditions and retaliatory tariffs could impact South Africa by […]<\/p>\n","protected":false},"author":1,"featured_media":9413,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"jnews-multi-image_gallery":[],"jnews_single_post":{"subtitle":"","format":"standard","override":[{"template":"1","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"top","share_float_style":"share-monocrhome","show_featured":"1","show_post_meta":"1","show_post_author_image":"1","show_post_date":"1","post_date_format":"default","post_date_format_custom":"Y\/m\/d","show_post_reading_time":"0","post_reading_time_wpm":"300","post_calculate_word_method":"str_word_count","show_zoom_button":"0","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","number_popup_post":"1","show_post_related":"1","show_inline_post_related":"1"}],"image_override":[{"single_post_thumbnail_size":"crop-500","single_post_gallery_size":"crop-500"}],"trending_post_position":"meta","trending_post_label":"Trending","sponsored_post_label":"Sponsored by","disable_ad":"0"},"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":{"view_counter_number":"0","share_counter_number":"0","like_counter_number":"0","dislike_counter_number":"0"},"footnotes":""},"categories":[32,30],"tags":[1384,122],"class_list":["post-15412","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-southern-africa","tag-g20","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/15412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/comments?post=15412"}],"version-history":[{"count":0,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/posts\/15412\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/media\/9413"}],"wp:attachment":[{"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/media?parent=15412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/categories?post=15412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qiraatafrican.com\/en\/wp-json\/wp\/v2\/tags?post=15412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}