JOHANNESBURG, Nov 22 (Reuters) - Below are comments from South African Reserve Bank Governor Gill Marcus on the Monetary Policy Committee’s interest rate decision on Thursday.
”The inflation forecast of the bank reflects a deterioration in inflation outlook for 2013 compared with the previous forecast.
”Inflation is now expected to average 5.6 percent in the final quarter of 2012 and 5.6 percent for the year. It is expected to average 5.5 percent in 2013 and 5 percent in 2014 with a peak of 5.7 percent expected in the first quarter of 2013.
“This nearer term depreciation is mainly due to higher expected food inflation as well as the recent depreciation of the rand.”
”The domestic economic growth outlook has deteriorated, largely as a result of the continued global slow down and aggravated by domestic events.
”Mining output has declined significantly as a result of work stoppages and there are likely to be longer term implications for output, export and employment as the mines adjust to higher labour costs.
”The banks forecast of GDP growth has been revised downwards from 2.6 percent to 2.5 percent in 2012. Growth in 2013 is now expected to average at 2.9 percent from 3.4 percent previously.
“The growth forecast for 2014 has been revised down from 3.8 percent to 3.6 percent.”
”The rand is expected to remain sensitive to both unfolding domestic economic and political development in addition to global risk perception.
“However, the rand is expected to remain volatile and subject to overshooting and its depreciation poses an upside risk to inflation outlook.”
“In the light of these factors, the MPC is of the view that the current accommodative stance remains appropriate and has therefore decided to keep the repurchase rate unchanged at 5.0 percent per annum. As always, the MPC will monitor developments closely and will not hesitate to act in a manner consistent with its mandate.” (Reporting by Olivia Kumwenda, Sherilee Lakmidas and Tshepo Tshabalala)