COSATU notes the Reserve Bank’s decision to keep repo rate steady

The Congress of South African Trade Unions (COSATU) is disappointed at the South African Reserve Bank (SARB)’s decision to leave the repo rate unchanged. With inflation having dropped from 5.1% in April to 4.6% in May, we were hoping the bank would follow suit and lower the repo rate.

The Federation expects as inflation is projected to fall over the next few months, the SARB will move to lower the repo rate, providing badly needed relief to workers and the economy that has stagnated in recent years. It is critical that the SARB balance its mandate between managing and reducing inflation, which has a devastating effect on workers’ salaries and their ability to take care of their families.

Whilst there is little that government can do about the root causes of inflation, namely international oil prices that are frequently destabilised by wars far from South African shores, government needs to expedite the review of the fuel price regime to see where taxes can be reduced to give relief to consumers, commuters and the economy.

This week the International Monetary Fund maintained this year’s GDP growth forecast for South Africa at 0.9% despite with the country having gone more three months without loadshedding and reports of good progress in the logistics sector.

After the pomp and ceremony of the opening of Parliament today, COSATU expects the Government of National Unity (GNU) to move with speed to unlock the economy by intensifying support for Eskom to reduce its dependency on double digit electricity tariff hikes. Further interventions are needed at Transnet Freight Rail and Metro Rail to protect food and commuters from fuel price hikes.

Issued by COSATU

For more information please contact:

Zanele Sabela(COSATU National Spokesperson)

Cell: 079 287 5788

Email: zanele@cosatu.org.za