Written by Patrick McGroaty | From The Wall Street Journal

South Africa’s plans to add to a spate of emerging-market interest-rate increases were stymied again on Thursday by the country’s dismal economic growth outlook.

South African Reserve Bank Governor Gill Marcus said Thursday that the bank’s key interest rate would remain at 5.5% for now, despite rising inflation and a pledge to raise rates over time.

“Interest rates will have to be normalized in due course,” Ms. Marcus said.

But while South Africa’s currency has rallied recently and inflation has stayed in line with the bank’s forecasts, the trajectory for economic growth continues to disappoint.

Ms. Marcus lowered her forecast for economic growth this year by half a percentage point to 2.1%. That is hardly better than the 1.9% rate at which the economy expanded last year.

She said data released next week is likely to show the economy grew less in the first quarter than any three-month period since 2009.

Read more at The Wall Street Journal