Fin24

Economic growth seen slowing to 1.5%

2012-11-23 16:02

Johannesburg - 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% compared with 3.2% 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% from 3% 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% 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.

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% 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.

Comments
  • crystal.core.5 - 2012-11-23 16:31

    I strongly beleive the Marikana incident was entirely politically motivated. The damage the ANC politicians have done to our economy and global public perception with the 'games' they played at Marikana in addition to their numerous and material other 'mistakes' is unquantifiable. They are overdue to ALL be kicked the hell out of power! South Africa belongs to South Africans, not these thugs running the country!

  • george.larkins.14 - 2012-11-23 17:49

    Everything will slow down with this pathetic Goverment.They just interested in their own POWER and do not worry about the people and the future.I just hope the people that put them into power realised it and with the next election make their voice heard.

  • altus.kirsten - 2012-11-24 06:04

    ...and the poor will suffer as a result!

      J.Stephen.Whiteley - 2012-11-24 08:26

      Sadly, yes. 1.5% is also the average population growth, more among the poor. And GDP includes State spending, half of it lousy value for money.

  • gavin.allchurch1 - 2012-11-25 06:14

    I made a quiet prediction to myself in April this year. Year end growth of 1.9%. Looks like it might be close.

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