SA growth accelerates to 3%

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IOL economy arrows Filomena Scalise

Johannesburg - South Africa’s economy grew at its fastest pace in a year in the second quarter as manufacturing output climbed.

Gross domestic product rose an annualized 3 percent from 0.9 percent in the first three months of the year, Statistics South Africa said in a report released in Pretoria today.

The median estimate of 18 economists in a Bloomberg survey was 3.3 percent.

“A stronger print should not be taken as a signal of strengthening growth momentum, but rather as a statistical bounce,” Peter Worthington and Miyelani Maluleke, economists at Absa Bank Ltd.’s corporate and investment banking unit, said in a note to clients before the data was released.

“Downside risks have mounted for our third-quarter forecast, mainly as a result of industrial action in a number of key sectors.”

Strikes and slumping consumer and business confidence may limit growth in Africa’s largest economy in the second half of the year, according to the Reserve Bank, which has kept its benchmark repurchase rate at 5 percent for more than a year to keep inflation under control.

The bank in July lowered its forecast for economic growth for this year to 2 percent from 2.4 percent.

The rand’s 18 percent plunge against the dollar this year is putting pressure on inflation, which exceeded the bank’s 3 percent to 6 percent target for the first time in 15 months in July.

The central bank is forecasting inflation to average 5.9 percent this year. - Bloomberg News

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