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South Africa's economic growth rate slows

in International Business

South Africa's economic growth rate slows

The rate of growth in the South African economy slowed sharply in the first quarter of the year, hit by a big fall in output from its key mining sector.

In the January to March period, South Africa’s economy – the biggest economy in Africa – grew 2.7% on a seasonally-adjusted and annualised basis.

This compares with a 3.2% rise in the last three months of 2011.

Output from South Africa’s mining sector fell 16.8%, due in part to a six-week strike at a platinum firm.

The shutdown took place at Impala Platinum, the world’s second-largest producer of the precious metal.

The wider mining industry was also hit by reduced demand from Europe.

Estimate cut

The slowdown in the economy was not as bad as the 2.4% growth rate expected by analysts for the first quarter.

This was due to a bigger-than-expected 7.7% rise in production from the country’s factories.

On an unadjusted basis, the South African economy grew 2.1% in the first quarter, down from 2.9% in the last three months of 2011.

Kevin Lings, chief economist at South African investment firm Stanlib, said: “We know mining was weak because of all the closures and strike activity, especially around platinum.

“The other sectors held up reasonably well, especially manufacturing.”

The South African central bank now expects the country’s economy to grow by 2.9% this year, down from its previous estimate of 3%.

Source: BBC



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