Lesetja Kganyago: Address - University of Limpopo

Address by Mr Lesetja Kganyago, Governor of the South African Reserve Bank, at the University of Limpopo, Polokwane, 5 September 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Ladies and gentlemen, it gives me great pleasure to be here in Limpopo and to address you today. This province is home to the baobab tree – a symbol of growth amid adversity, which bears a stark resemblance to the domestic economy's resilience, despite its challenges. The province's contribution to commodity exports has also helped South Africa withstand the headwinds to growth in recent years.

Over the past three years, the global economy has endured multiple large and overlapping adverse supply shocks. This was at a time when the COVID-19-induced expansionary fiscal and monetary policies were firmly in place. This confluence of factors pushed global inflation to multi-decade highs, eroding real incomes and forcing consumers to make some difficult choices.

Today, I want to talk about how the high cost of living has impacted households globally and relate it more specifically to how the typical South African consumer has fared. In doing so, I will discuss how the resilience of global demand has perpetuated high inflation; how global inflation has propagated into the domestic economy; and how we, as the South African Reserve Bank (SARB), have responded to this inflation scourge.