The SARB estimates that short-term potential real GDP growth in South Africa has slowed to 1,8 per cent this year, from an estimated pace of 3,25 per cent around 2010. Hence, the country probably has a narrower negative output gap than was assumed a few years ago.
Otherwise, the large scale purchase of JGBs may lead to a substantial and lasting ratcheting up of long-term rates, which would pose a serious problem for economic recovery and the financial position of the government. Taking this point into consideration, the Bank of Japan has already purchased about 22 trillion yen in JGBs annually, beside the Asset Purchase Program.