Banks are now expecting interest rates to stay higher for longer in South Africa, and the middle class is hanging on by a thread \u2013 with little to no relief on the horizon for the next two years. <\/p>\n\n\n\n
Following the release of Standard Bank’s end-of-year results in March, CEO Sim Tshabalala said the global economic environment continues to be marked by uncertainty and supply shocks from conflicts in Ukraine, the Middle East, and Africa. <\/p>\n\n\n\n
Although none of the bank’s operations have been directly affected by recent global events, they have put pressure on economies all across Africa. <\/p>\n\n\n\n
Tshabalala noted South Africa, in particular, has been hit hard due to its small but highly open economy, making it vulnerable to external shocks. <\/p>\n\n\n\n
Standard Bank predicts that there will only be a slight moderation in inflation in 2024, with an average of 5% throughout the year. <\/p>\n\n\n\n
This is at the upper end of the Reserve Bank’s target range of 3% to 6%, which means that significant rate cuts are unlikely to happen. <\/p>\n\n\n\n
As a result, Standard Bank only expects the Reserve Bank to reduce rates by 75 basis points in 2024, beginning only in September.<\/p>\n\n\n\n