BoB upbeat on 2018 economic prospects

Mbongeni Mguni | Friday May 4, 2018 13:34

On Tuesday, BoB governor, Moses Pelaelo announced that the key bank rate would be maintained at five percent, based on subdued domestic demand pressures and low upward threats to inflation. The accommodative monetary policy position supports economic activity particularly in the non-mining sector.

Government expects 2018 growth to reach 5.3%, higher than the World Bank’s forecast of 4.7%. Last year, the economy grew by 2.4%, down from government’s forecast of 4.7%, a drop economists have said was due to the closure of BCL and Tati Nickel mines.

Global growth is projected to reach 3.9% in 2018, from an estimated 3.8% in 2017 and 3.2% in 2016.

The central bank’s Research and Financial Stability director, Tshokologo Kganetsano told BusinessWeek that indicators for economic growth this year were looking rosy. “In 2017, we saw slow growth in total output but for 2018, we expect improvement driven by the global recovery that will lead to greater demand for our diamonds,” he said responding to question at the Monetary Policy briefing.

“With those increased diamond sales, we expect some improvement in diamond polishing activities and other sectors which is where we see better growth in the trade sector. “In the water and electricity sector, we are expecting stable supply, which in turn is important for production, especially as we are coming from periods of shortages. This will in turn support economic activity.”

Deputy governor, Kealeboga Masalila told BusinessWeek that improved global prospects also supported key economic areas such as tourism, one of the country’s revenue spinners. “Areas such as telecommunications, financial services and others all benefit and are all important in supporting overall growth,” he said.