PRETORIA, July 23 (Reuters) – Growth in South Africa’s
economy remains “pedestrian”, with the manufacturing sector
vulnerable to weak global growth because of its impact on
exports, the Reserve Bank said on Monday.
While inflation has moderated, food prices were likely to
stay elevated for the rest of the year due to higher transport,
electricity and refrigeration costs and wage increases, the Bank
said in its 2012 annual economic report.
The report reviews economic development over the last 18
months and comes four days after the Bank unexpectedly cut its
benchmark interest rate to 5.0 percent and lowered its 2012
growth forecast to 2.7 percent from 2.9 percent.
“The manufacturing sector remains susceptible to renewed
weakness in the global economy, particularly in the euro area,
through possible declines in exports,” the Bank said.
Manufacturing accounts for about 15 percent of Africa’s largest
economy.
The central bank also blamed subdued domestic growth on
infrastructure bottlenecks.
South Africa’s inclusion from October in Citigroup’s World
Government Bond Index should give it a larger and more
diversified investor base which could raise capital inflows and
support the raising for funds for infrastructure, it added.
(Reporting by Stella Mapenzauswa; Editing by Ed Cropley)
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