Global economic uncertainty challenges growth and inflation outlook, warns Sarb

THE South African Reserve Bank (Sarb) has warned that the possibility for further rate cuts in emerging economies was now very limited as major central banks across the world were set to adopt a cautious approach on monetary policy amid heightened inflation risks.

- SIPHELELE DLUDLA

This comes as the US decision to impose hefty import tariffs on more than 75 countries shook the markets last week, plunging the global economy to a brink of a potential recession as fears of spiking inflation rose.

Sarb Governor Lesetja Kganyago on Tueday said economic faults stemming from policy shifts and heightened trade tensions, have emerged, adding to pre-existing geopolitical tensions.

Kganyago said these shocks presented new risks to both growth and inflation, and have rendered the global economic outlook more difficult to predict.