Johannesburg - South Africa's interest rates are likely to
stay this year as the Reserve Bank looks to curb rising inflation amid subdued
economic growth, a Reuters poll found on Thursday.
Weak domestic demand is expected to limit economic expansion
to 2.60% in 2013, the survey of 21 economists showed, shaving a tenth of a
percentage point from the previous forecast last month.
"We believe that consumers are still under pressure,
and that their spending will continue to lose momentum," said Elna
Moolman, economist at Renaissance Capital in Johannesburg.
The South African Reserve Bank (Sarb) is expected to keep
its repo rate unchanged at 5.00% for the rest of this year, before rising to
5.50% by the end of 2014.
The Sarb kept its benchmark repo rate unchanged at 5.00% - a
four decade low - in November as above-inflation wage settlements helped calm
the worst mining unrest since apartheid.
"In the context of inflation that might temporarily
spike above the target ceiling (of 6%), we do not expect further relief from
the Sarb despite the weakness in the economy," Moolman said.
The survey forecast higher average annual consumer inflation
in 2013 than last month, of 5.69% compared with 5.58%.
"There is the possibility of breaching (3%-6% target
band) in the middle part of the year, (but) then it is likely to come down
again," said Hugo Pienaar, economist at the Bureau for Economic Research.
"It is the combination of the lag impact of higher
maize prices, both internationally and locally, also the sustained weaker level
of the rand that is likely to feed through to some of the CPI components."
The rand has shed almost 5%against the dollar since the
start of 2012, hit by a ballooning current account deficit and the labour
Inflation is seen averaging 5.50% next year from a
previously anticipated 5.39%.
The Econometer, a confidence gauge based on six weighted
indicators that looks two years ahead, was relatively steady at 261.53 in
December from 261.22 in November.
For 2012, the treasury forecast 2.5% economic growth,
reflecting infrastructure bottlenecks and the impact of nearly three months of
strikes in the platinum and gold mines last year.