South Africa's economic growth falls to 0.7% in third quarter
South Africa's economy, the biggest on the continent, grew at the slowest pace in more than four years in the third quarter as labor strikes weighed on output.
Gross domestic product rose an annualized 0.7 percent compared with a revised 3.2 percent in the three months through June, Statistics South Africa said in a report released in Johannesburg today. The median estimate of 19 economists in a Bloomberg survey was 1 percent.
Strikes by workers at carmakers in the third quarter curbed output from an industry that accounts for almost 10 percent of the economy. The Reserve Bank last week cut its 2013 economic growth forecast to 1.9 percent from 2 percent, and kept the benchmark repurchase rate at the lowest level in more than three decades to help support consumer spending.
Growth has been sluggish "largely due to strike activity and its impact on manufacturing production," Johann Els, an economist at Old Mutual Investment Group in Cape Town, said in an e-mailed note before the data was released. "We are not overly optimistic about a rebound in the fourth quarter's GDP growth despite manufacturing production normalizing after a disrupted third quarter."
Consumer and business confidence in Africa's largest economy remained close to record-low levels in the fourth quarter.
While the economy is forecast to grow at the slowest pace since a 2009 recession this year, the Reserve Bank said last week there is no room for cutting interest rates as further rand weakness may fuel inflation. The currency's 16 percent slide this year against the dollar is the most of 16 major currencies tracked by Bloomberg.
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