<strong>By:</strong> <a href="https://www.ber.ac.za/home/"><b>Bureau for Economic Research (BER)</b></a>

In the fourth quarter of 2018, average inflation expectations declined by 0.2 percentage points (% pts) across the whole forecast horizon. Previously, analysts, business people and trade union representatives on average expected inflation to pick up from 5.3% in 2018 to 5.6% in 2020. In the fourth quarter, they revised their forecast slightly downwards to 5.1% and 5.4% respectively.

After reaching an all-time low of 5.3% in the first quarter of 2018, five-year expectations edged up to 5.5% in the third quarter. In the fourth quarter, expectations reversed to 5.3%.

After falling to 5.2% in the first quarter (the lowest level since 2006), household inflation expectations picked up to 5.6% in the second quarter of 2018. In the third and fourth quarter, expectations moderated to 5.4%.

In the fourth quarter of 2018, the survey respondents were less optimistic regarding economic growth, although they still expect growth to improve going forward. On average, their expectations for growth in 2018 and 2019 fell by 0.3% pts, to 0.9% and 1.4% respectively.

Changes to the rand/US dollar exchange rate outlook, on average, were marginal during the fourth quarter.

The survey respondents expected an exchange rate of R14.19 at the end of 2018, compared to an expectation of R14.16 during the third quarter. Regarding the end of 2019, the average forecast was lowered from R14.29 to R14.25.

All three social groups expected salaries and wages to increase by 6.3% in 2018. For 2019, the three groups expect salaries to rise by 6.6%.

<strong>The latest results are discussed in more detail at <a href="https://www.ber.ac.za/home/">www.ber.ac.za</a>.</strong>