SARB: slow SA economy growth due to strikes

Fin24 reports that The South African Reserve Bank (SARB) warned that mining strikes would likely curb economic growth for the rest of the year.

31 Oct 2012

The central bank said strikes, which have hit vital gold, platinum and coal production, coupled with weaker performance in the industrial sector, would trim output.

In a report published Tuesday, the bank's regular Monetary Policy Review said that recent volatility in the mining sector and a weaker secondary sector suggest lower output growth for the economy as a whole in the third and likely fourth quarters of 2012. The comments came just weeks after the bank revised its 2012 forecast down to 2.6%.

According to Fin24, the bank noted a "strong" flow away from South Africa shares by foreign investors. "Concerns over developments in the mining sector appear to be a primary factor behind strong sales of South African equities by non-resident investors," it said, adding that generous miners' wage deals could fuel inflationary pressures. Finally, SARB warned that Africa's largest economy also faced headwinds from abroad.

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