The South African Central Bank raises rates while observing weak GDP growth.

On Thursday, the South African central bank increased the country’s key interest rate once more to combat inflation, but this time at a slower rate since it expected the economy to expand slowly as a result of ongoing power outages.

Rates have been rising at central banks all around the world to control rising consumer costs.

The South African Reserve Bank began hiking interest rates in November 2021 and released its highest increase in a decade in July of last year, amounting to 0.75 percentage points.

The central bank announced Thursday that it was raising the rate by 0.25 percentage points following two additional rises of 0.75 percentage points.

At present, the benchmark rate is 7.25 percent.

Inflation is expected to decrease from 6.9 percent last year to 5.4 percent in 2023, according to the central bank.

Governor Lesetja Kganyago stated at a news conference in Pretoria that “the revised repurchase rate remains supportive of credit demand in the near term, while hiking rates to levels more consistent with the current estimate of inflation and risks to it.”

The bank predicted that due to the electrical supply issue afflicting the continent’s most industrialized economy, the GDP will only increase by 0.3 percent in 2023.

Up from 1.8 percent in 2021, the economy expanded by 2.5 percent last year.