The Monetary Policy Committee of the SA Reserve Bank was likely to downplay the importance and relevance of slower economic growth in its interest rate decisions, Nedbank said on Tuesday.

"The focus is likely to be on inflation, especially the deteriorating short-term outlook and worsening inflationary expectations," Nedbank said.

The continued increase of global oil prices, still high global food prices, the continued uncertainty around future electricity tariffs, and rising inflationary expectations would probably ensure another 50 basis point hike in interest rates in June.

Moreover, the risk of another 50 basis point hike in August has also increased sharply, Nedbank said.

Earlier on Tuesday, Stats SA said the seasonally adjusted real GDP at market prices for the first quarter of the year rose by an annualised rate of 2.1 percent compared with the fourth quarter of 2007.

The figure came in well below market expectations.

A Reuters poll showed a consensus forecast for first quarter GDP growth of 2.4 percent on an annualised basis.

The median estimate of 15 analysts surveyed by Bloomberg put GDP at 2.5 percent for the first quarter.

Sapa