* Growth could be weaker due to global outlook
* Central bank will continue to target inflation
(Adds details, background)
By Xola Potelwa
DURBAN, South Africa, June 7 (Reuters) – Global economic
developments pose downside risks to the central bank’s
expectations for growth this year, while the weaker rand could
fuel inflation, Reserve Bank Governor Gill Marcus said on
Thursday.
Speaking at a National Union of Metalworkers of South Africa
congress, Marcus said the central bank was concerned about weak
output in the key manufacturing sector, which accounts for about
15 percent of GDP.
The Bank sees economic expansion of 2.9 percent in 2012
compared to previous expectations of 3.0 percent, slightly
higher than the National Treasury’s prediction of 2.7 percent
growth this year.
“The risks to this forecast are to the downside, primarily a
result of the risks posed by global developments,” she said.
The Reserve Bank left its repo rate at a three-decade low of
5.5 percent last month, sounding a warning about the effects of
a bleak global outlook on the fragile domestic economy while
saying inflation was likely to moderate.
Marcus said the depreciation of the rand, largely
due to the euro zone debt crisis, posed the main risk to the
inflation outlook.
Continued…
