Has the monetary policy response been excessive? This raises the question of whether the SARB has gone for the overkill. There is no doubt that the tighter stance of monetary policy has caused a slowdown in domestic household consumption expenditure. That is good. This is something that we wanted to achieve in order to moderate demand pressures in the economy.
There are signs that output growth is also slowing down, but this is not solely due to monetary policy actions alone. The global economic slowdown and electricity supply constraints in South Africa are also important variables influencing this outcome.