QPM forecast summary table May 2023 MPC Press report
Summary tables of quarterly projection model projections
Summary of selected forecast results
* Figures below the forecast in parentheses represents the previous MPC forecast
1. Selected forecast results (quarterly)
Percentage change
(year-on-year)
Actual
Forecast

Steady state
1.
Headline CPI

Core CPI

2. Selected forecast results (annual)
Percentage changes
(unless otherwise indicated)
Actual
Forecast

Steady state
1.
GDP growth

Output gap

Nominal effective exchange rate

Real effective exchange rate

Real exchange rate gap

Repurchase rate (end of period)

Current account balance

(ratio to GDP)

Notes
A. Nominal effective exchange rate: This is based on the bilateral exchange rates of our three largest trading partners (euro area, United States and Japan). The bilateral exchange rates are weighted by export trade weights.
A. Nominal effective exchange rate: This is based on the bilateral exchange rates of our three largest trading partners (euro area, United States and Japan). The bilateral exchange rates are weighted by export trade weights.
B. Nominal exchange rate steady state: This is estimated using the Purchasing Power Parity (PPP) condition, which links the depreciation of the nominal exchange rate to the inflation differential between SA and abroad. Given that the REER depreciation is zero at steady state, the nominal exchange rate will
therefore depreciate by 2.5% per year in steady state, reflecting the inflation (target) differential between domestic (4.5%) and foreign (2.0%) inflation.
B. Nominal exchange rate steady state: This is estimated using the Purchasing Power Parity (PPP) condition, which links the depreciation of the nominal exchange rate to the inflation differential between SA and abroad. Given that the REER depreciation is zero at steady state, the nominal exchange rate will
C. Real effective exchange rate: This is the nominal effective exchange rate deflated by the consumer price differential (between South Africa and the trade weighted CPI of euro area, United States and Japan).
C. Real effective exchange rate: This is the nominal effective exchange rate deflated by the consumer price differential (between South Africa and the trade weighted CPI of euro area, United States and Japan).
D. Real exchange rate gap: The gap signifies the extent to which the real exchange rate deviates from its estimated equilibrium level. A positive gap shows an overvaluation of the currency, and vice versa.
D. Real exchange rate gap: The gap signifies the extent to which the real exchange rate deviates from its estimated equilibrium level. A positive gap shows an overvaluation of the currency, and vice versa.
E. Repurchase rate: End of period refers to the average repo rate for the last quarter of the year. The nominal repo rate steady state is calculated as the sum of SA inflation target (4.5%) and the steady state neutral real interest rate (2.5%).
E. Repurchase rate: End of period refers to the average repo rate for the last quarter of the year. The nominal repo rate steady state is calculated as the sum of SA inflation target (4.5%) and the steady state neutral real interest rate (2.5%).
F. Steady state: This is the long run value in the model. While model equilibriums can have different values over the medium term, as conditions change, all equilibriums eventually reach a steady state, where they stabilise. For more details on the estimation of steady states, see Botha, De Jager, Ruch and Steinbarg
(2017) - South African Reserve Bank Working Paper Series No. WP/17/01.
F. Steady state: This is the long run value in the model. While model equilibriums can have different values over the medium term, as conditions change, all equilibriums eventually reach a steady state, where they stabilise. For more details on the estimation of steady states, see Botha, De Jager, Ruch and Steinbarg
G. Current account balance as a percentage of GDP: Forecast is obtained from the SARB's Core macroeconometric model.
G. Current account balance as a percentage of GDP: Forecast is obtained from the SARB's Core macroeconometric model.