S.Africa growth slumps to 1.2% as mining strikes bite
Economic growth in South Africa more than halved in the third quarter to 1.2 percent as mining strikes ravaged the continent's largest economy, official data showed on Tuesday.
Growth slowed to its lowest level in more than three years, precipitously falling from the 3.4 percent annualised rate seen in the second quarter.
Statistics South Africa said the drop was largely due to a 12.7 percent fall in mining and quarrying output “due to lower production in all mining divisions.”
The period from July to September saw a wave of deadly mining strikes across South Africa, which left at least 50 people dead and crippled production in the vital sector.
Economists had expected the mining unrest to be reflected in Tuesday’s figures, but the scale of the decline was much larger than expected.
The finance and service sector, which accounts for around one fifth of South Africa’s economy also saw slower growth.
Statistics South Africa noted “slower increases” from the equity, bond and other financial markets, as well as the banking sector.
As many countries in Africa enjoy an unprecedented sustained growth, South Africa has quickly become the poor man of the continent, with confidence hit by a series of ratings downgrades and sclerotic policymaking.
Last week the South African Reserve Bank warned that growth would slow considerably in the coming quarters, noting the outlook had “deteriorated.”
The bank cut its growth outlook for 2013 dramatically from 3.4 percent to 2.9 percent, while predicting that inflation would peak at 5.7 percent in early 2013.