Standard Bank Group revises South African interest rate forecast amid rising oil prices

STANDARD Bank Group believes that the higher oil prices emerging from the latest crisis in the Middle East have already impacted the outlook for the South African economy and for other countries on the continent.

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CEO of the biggest bank in Africa by assets, Sim Tshabalala, said on Thursday in an interview at the release of their financial results for the 12 months to December 31 that before the crisis, the bank was forecasting at least three interest rate cuts this year in South Africa, of 25 basis points each. However, since then, the bank has revised its forecast to only two interest rate cuts this year, in May and September, with a third to only follow next year.

He said that they believed there to be two likely scenarios. A benign outcome might be for oil flows of some 1,5 million barrels per day to be disrupted by the war in Iran, which would translate into an average of $80 per barrel, resulting in a 0,2% reduction in global GDP growth.