SA growth seen slowing to 1.5%

Filomena Scalise

Filomena Scalise

Published Nov 23, 2012

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The pace of economic growth in South Africa probably halved in the third quarter, according to a Reuters poll, after wildcat mining strikes turned into the deadliest labour unrest since the end of apartheid in 1994.

Fifteen economists forecast growth in the quarter to have braked sharply, with the median forecast estimating that gross domestic product (GDP) grew 1.5 percent compared with 3.2 percent in the previous three months.

Recession in the euro zone also hurt demand for South African goods.

On a year-on-year basis, growth is expected to have slowed to 2.6 percent from 3.0 percent in the second quarter.

“The slowdown has largely been a result of the mining sector strikes, which have caused output levels in the sector to plummet,” said Shilan Shah of Capital Economics.

Mining accounts for 4 to 6 percent of gross domestic product. Repeated disputes and stoppages over low wages in the sector reflect widespread anger over enduring inequalities in Africa's biggest economy.

More than 50 people have been killed in the unrest.

The last of a wave of illegal strikes that swept gold and platinum mines ended a week ago after workers accepted an offer from Anglo American Platinum Ltd, the world's top producer of the precious metal.

But tension still persists at some mine shafts between rival unions, and two people were killed on Thursday in a clash between feuding union members at a gold mine west of Johannesburg.

“Meanwhile, the performance in other sectors has been weak. Manufacturing PMI readings have slowed for three consecutive months, as a result of weak demand from the euro zone,” Shah added.

Manufacturing contributes about 15 percent to South Africa's gross domestic product.

Statistics South Africa is due to release economic growth data for the third quarter on Tuesday, while releases of credit,

money supply and producer price inflation for October are due on Thursday and trade data on Friday. - Reuters

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