S.Africa economic growth slows to 1.3%

30th August 2011, Comments 0 comments

South Africa's economy grew 1.3 percent in the second quarter, slowing sharply from 4.5 percent in the first three months of the year, officials said Tuesday, adding momentum to calls for an interest rate cut.

Fears have been mounting that the gloomy global economic picture will slow South Africa's recovery from a 2009 recession -- the first for Africa's largest economy since the end of apartheid in 1994.

The downturn was led by slower activity in manufacturing, mining and agriculture, Statistics South Africa said.

The central bank has held its key interest rate at 5.5 percent since November, after slashing it nine times from a December 2008 starting point of 12 percent.

Central Bank governor Gill Marcus will be under pressure to cut rates again in a bid to spur growth at the the bank's next monetary policy committee meeting in November.

But policy makers are also wary of upward pressure on inflation, which stood at 5.3 percent in July and has been trending toward the top of the central bank's target range of three to six percent.

Despite sustained post-recession growth, South Africa has struggled to add jobs and so cut into its official unemployment rate of 25.7 percent.

© 2011 AFP

0 Comments To This Article