At the World Economic Forum, SARB's Lesetja Kganyago discusses South Africa's economic outlook, inflation challenges, and his critical stance on Bitcoin reserves
Image: Thobile Mathonsi / Independent Newspapers.
South African Reserve Bank (SARB) Governor Lesetja Kganyago emphasised that sentiment around SA’s economic outlook is improving when compared to last year. However, he warned that inflation is still an issue.
Kganyago was speaking at the World Economic Forum’s annual meeting in Davos, Switzerland and told international media that GDP could grow to 2% in 2025, versus the 1.1% growth projected for 2024.
“Depending on who is forecasting, growth varies between 1.6% and 2% (in 2025). We think it would be closer to 2% than closer to 1.6%,” he told Reuters Global Markets Forum.
“The structural reform agenda has gained momentum, and it has been given impetus by this Government of National Unity with a very clear focus on taking South Africa’s economic trajectory to the next level,” Kganyago added.
The Governor noted that South Africa's inflation outlook is more “muddied” by protectionist policies impacted by President Donald Trump and his new administration.
Kganyago said that inflation will also be impacted by the dollar and rand exchange rate, global oil prices and local food prices.
Kganyago was also critical of creating a strategic Bitcoin reserve. Kganyago instead called for having other reserves such as platinum, coal, or beef.
“I would have a significant problem with a lobby that says governments should hold this asset or that asset. Without what the strategic intent of what the government (is trying to do),” he said.
“Because you see there is a history to gold because there was once a gold standard. Currencies were packed to gold. But to now say okay bitcoin….what about platinum or coal…what about beef or mutton reserves or apple reserves? Why Bitcoin?,” the governor challenged.
“It is a public policy issue that we have got to be engaged in and I would caution against the move then that would say there is an industry with a particular interest in a particular product and we would like to impose it on society and say society must hold this as a reserve. I would have a fundamental problem with this,” he emphasised.
Bitcoin has been on a major high streak with it now trading at around $105,339 (R1.9 million) on Tuesday at 9:30am.
At the beginning of the week, Bitcoin reached a new all-time high surpassing $110,000 (R2.03 million), ahead of Trump's inauguration.
Analysts have argued that the price of Bitcoin could reach as high as $150,000 (R2.7 million) by mid-2025.
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