Central Bank of Ewsatini Governor Majozi Sithole


Latest figures indicate that annual consumer inflation slightly rose from 5.1 per cent in February 2019 to 5.3 percent in March 2019. The Central Bank of Eswatini has issued that food inflation recorded an overall zero growth last year compared to 8.1 percent in 2017. CBE Governor, Majozi Sithole, delivering his annual monetary policy statement last month at Happy Valley at Ezulwini said the annual headline consumer inflation averaged 4.8 percent
in 2018, down from 6.2 percent in 2017 as inflationary pressures were on the downside for most part of the year. A significant slow down was observed in the consumer price index (CPI) for goods (mainly non-durable goods), which are mainly dominated by food price developments. Food inflation recorded an overall zero growth in 2018 compared to 8.1 percent in 2017. Favourable weather conditions resulted in an improvement in food production both locally
and regionally, supporting a deceleration in food prices. Core inflation, which is CPI excluding food, auto-fuel and energy, averaged 6.7 percent in 2018 compared to 5.5 percent in 2017 reflecting that underlying inflationary pressures were on the upside in 2018. The increase was mainly due to increases in prices for Transport and Food and Non-alcoholic beverages. Economic activity, as measured by real GDP, is estimated to have grown by 0.6 per cent in
2018 from 1.9 per cent recorded in 2017. Said Sithole, “The ongoing government’s cash flow challenges triggered the accumulation of domestic arrears and reinforced the need for fiscal consolidation which manifested through cuts in both recurrent and capital expenditure as well as increases in some tax rates and fees in the 2018/19 fiscal year. This weighed negatively on construction activities and other services sectors.” The primary sector is estimated to have grown by 5.9 percent in 2018 from a contraction of 4.2 percent recorded in 2017, mainly boosted by better performance in crop and animal production, which were supported by favourable weather conditions in the review
period. A stagnant growth is estimated for the secondary sector in 2018, down from 3 percent in 2017, due to subdued manufacturing and construction activities. The tertiary sector is estimated to have grown at a slower rate of 0.2 percent in 2018 compared to 2.0 percent in 2017. Even though the short-to–medium term growth outlook is expected to remain challenged as the fiscal situation is not expected to improve (at least in the short term), it is expected to gradually recover in the medium term. Growth in 2019 is forecasted at 1.1 percent, a downward revision of 0.6 of a percentage point from the September 2018 projections. The revision is in line with the lower output than earlier anticipated in the growing of crops. I would like to appreciate efforts by the Central Statistics Office and the Central Bank of Eswatini which have resulted in the March 2019 release of the first set of quarterly GDP figures with a historical series from 2013 to 2019. Recent trends reflect that after recording a
negative growth of about 3 per cent in the second quarter of 2018, the economy had a stronger rebound in the second half of the year, increasing by 3.7 per cent in the third quarter of 2018 before slowing down to 1.5 percent in
the last quarter of 2018. Positive growth was mainly observed in the ‘wholesale and retail’, ‘communication’ and
‘financial services’ while ‘manufacturing’, ‘mining and quarrying’, ‘hotels and restaurants’ and ‘construction’ performed poorly

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