Johannesburg - South Africa's economic growth will slow through the rest of this year after a strong second quarter performance, according to a Reuters poll of economists who blamed widespread industrial strife for the slowdown.
Surveyed over the past 10 days, the poll's 19 economists trimmed their median growth outlook for this year to 2.0 percent, 0.2 percentage points lower than last month's consensus.
Data two weeks ago showed economic growth hit an annualised 3.0 percent in the second quarter, up from 0.9 percent in the first three months of the year, partly due to the gradual improvement in developed world economies.
But that looks set to slow markedly this quarter to 2.3 percent after strikes in the country's key mining industry.
“The second quarter GDP number was slightly better, so you might argue that raises the potential for the rest of the year,” said Hugo Pienaar, Bureau for Economic Research economist.
“But we are concerned about the second half of this year, especially the third quarter of this year given all the industrial action,” he added.
There have been signs of improvement, even recently.
Factory output rose 5.4 percent in July from a revised 0.5 percent and business surveys have struck an upbeat tone.
Still, economists are cautious.
South Africa, the continent's biggest economy, has suffered more strikes this quarter. Although not as violent as last year the unrest will still take a heavy toll on economic growth.
South Africa's unemployment rate has been stuck at 25 percent for years, while a labour turf war in the mining sector retains the potential to destabilise the economy.
Strikes have, however, waned recently as motor and gold industries return to work this week after crippling operations at some of the country's biggest producers.
The recently ended automakers strike is reported to have resulted in production revenue losses of 20 billion rand ($2 billion) over four weeks.
Economists polled expect the central bank to keep the repo rate at its four-decade low of 5.0 percent through next year and then raise it by 100 basis points in total in 2015.
The poll's median forecast for inflation this year was unchanged from last month's poll at 5.9 percent. - Reuters