PRETORIA Oct 30 (Reuters) – South Africa’s economic growth
is likely to take a hit in the second half of this year from the
worst mining unrest since apartheid, but the inflation outlook
remains evenly balanced, the Reserve Bank said on Tuesday.
In its bi-annual monetary policy review, the central bank
said the mining strikes, which have hit gold and platinum output
since August, suggested lower growth for the third and fourth
quarters of 2012.
Economic growth picked up to 3.2 percent in the second
quarter of the year.
While employment levels had increased up to the middle of
2012, the strikes suggested a worsening of job prospects, it
said.
The Treasury last week cut its growth forecast for Africa’s
biggest economy to 2.5 percent for 2012 from 2.7 percent seen
earlier, citing the impact of the mining strikes, the most
damaging since white-minority rule ended in 1994.
“The impact will be exacerbated if confidence weakens
significantly in other sectors of the economy,” the Reserve Bank
said.
The Bank lowered its own growth forecast to 2.6 percent in
September, warning then that labour unrest could hit investment
and undermine record loose monetary policy.
Interest rates are at four-decade lows after the central
bank reduced its benchmark repo rate to 5 percent in July,
citing a benign inflation outlook.
On Tuesday the Reserve Bank said inflation was still
expected to remain in the upper level of the 3-6 percent target
band and should settle down into a flat trajectory over the
2013-14 forecast period.
“Upside pressure in coming months is expected to emanate
from oil and food price increases, despite demand pressures
remaining relatively benign,” the bank said.
It added that the rand – which fell to nearly 9.00 against
the dollar in the worst of the strikes – also posed an inflation
risk.
(Reporting by Stella Mapenzauswa; Editing by Ed Cropley)
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