Stan Chart predicts tough times

Kabelo Adamson

Standard Chartered Bank Botswana Managing Director, Mpho Masupe, says the recent global and local events are likely to continue pushing up inflation.

When presenting the bank’s yearly financials for the year ended 31st December on Tuesday this week, Masupe predicted things are about to get from bad to worse.

With both the local and global economy having started to recover from the impact of COVID-19, Masupe said the war between Russia and Ukraine which has been going on since February will reverse the gains.

“This particular war is definitely going to impact the economy and a lot of industries will be affected. The effects that we have already seen is the oil price going up by the percent,” said Masupe.

While one ordinarily thinks only-oil based industries would suffer, Masupe says the reality is that everyone will be affected.

“Fuel prices have been increased and our consumers are definitely going to feel the pinch as food prices are also going to go under pressure,” he said.

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As a result, he said the economy will experience a sustained increase in inflation.

The Consumer Price Index shows that the February inflation stood at 10.6 percent, which was unchanged from the month of January which registered the same figure.

“We had thought that this was going to be transitory, we thought it is going to happen for about six or ten months but now this is going to be sustained for a longer period which will not auger well for the economy,” noted the Stan Chart MD.

As a response to these events, Masupe said central banks have been hiking interest rates even in economies which have not been hiking rates for a very long time.

“We expect rates to continue rising throughout the year, and for our business, one would think rates increases are great, but remember that we talking about our customers here,” Masupe said.

Meanwhile, Standard Chartered boss said after suffering a loss of P200 million losses in 2017, the bank has started to go into the right trajectory.

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The bank’s performance during the past year, the MD said, shows slight improvement in business momentum with positive response to the gradual economic recovery from the peak of the pandemic which was seen in 2020 and last year.

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