South Africa cuts three year growth outlook, holds rate

Striking platinum miners gather at the Wonderkop Stadium in Marikana on June 12, 2014 in Marikana, South Africa. By Mujahid Safodien (AFP/File)

Johannesburg (AFP) - South Africa's central bank downgraded its growth outlook for the next three years on Thursday, while leaving interest rates on hold.

Bank governor Lesetja Kganyago said Africa's most developed economy would grow by just 1.4 percent this year, as the outlook for 2015 and 2016 were slashed.

"The domestic growth outlook remains subdued," said Kganyago, speaking after his maiden meeting as chair of the bank's policy setting panel.

He replaced Gill Marcus who resigned in October.

Kganyago said economic growth would be 30 basis points lower than previously expected in each of the next two years.

The revised 2015 forecast was for 2.5 percent growth and 2.9 percent in 2016.

While the outlook for the economy remains weak, there was some respite from falling global oil prices, which have helped ease high inflation pressures that have been throttling consumers.

In September and October consumer price inflation stood at 5.9 percent, just shy of the bank's six percent upper target.

That respite gave the bank space to shy away from an interest rate rise at this meeting -- which while curbing inflation could also hit growth.