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Marcus: SA outlook deteriorating rapidly

Oct 10 2012 11:51

Grahamstown - South Africa's economic outlook is deteriorating rapidly with unrest in the mining sector and national transport strikes likely to lead to job losses, Reserve Bank governor Gill Marcus said on Wednesday.

Speaking to economics students in Grahamstown in the Eastern Cape province, Marcus reiterated her stance that the central bank had no target level for the rand.

A heavy fall in the currency on Monday to within a whisker of R9.0 to the dollar had prompted market speculation of official intervention.

Two months of violent, wildcat walkouts in gold and platinum mines, including the police killing of 34 strikers at Lonmin's Marikana mine on August 16, have hurt South Africa's international investment reputation, Marcus said, citing R5.6bn in net equity market outflows on Monday as evidence.

"That's an indicator of a loss of confidence. It's a huge indicator for us of loss of confidence," Marcus said.

"The outlook at the moment is deteriorating rapidly and if you look at the deficit of confidence, it is one of the reasons why it's very difficult to find a resolution," she said.

Besides the mining problems, a strike by more than 20 000 truckers has entered its third week, hitting fuel supplies around Johannesburg and affecting production at some car plants on the south coast.

Talks between the main transport union, Satawu, and freight employers broke down on Tuesday. The transport strike is due to widen next week with a one-day "sympathy" stoppage by port and railway workers.

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