S.Africa may revisit growth outlook after strikes -cbank

JOHANNESBURG (Reuters) - South Africa's growth forecasts will likely need to be reexamined given the impact of widening labour unrest on Africa's biggest economy, a central bank deputy governor said on Sunday.

South Africa has been hit by a wave of wildcat strikes since August that have spread beyond the mining sector, threatened industrial relations and sparked downgrades of the country's credit rating.

"Growth forecasts will most likely need to be revisited," South African Reserve Bank Deputy Governor Daniel Mminele said in a speech to a JP Morgan investor seminar in Tokyo on Sunday that was posted on the bank's website.

Mminele said that growth was expected to average 2.1 percent for the 2008-12 period, significantly lower than the 4.8 percent that South Africa averaged over the previous five years.

It was not immediately clear if those five-year numbers were the ones he expected to be revisited.

With growth already relatively shaky, analysts have said the festering labour unrest will put a further break on the economy and deter much-needed foreign investment.

Ratings agency Standard and Poor's on Friday cut South Africa's credit rating by one notch to BBB with a negative outlook, saying the strikes and social tensions could reduce fiscal flexibility and damage growth.

That followed a ratings cut by Moody's in late September, citing a deterioration in the government's debt profit and uncertain revenue prospects.

"As for the recent actions by rating agencies, these were obviously unfortunate and disappointing developments," Mminele said.

"It has to be acknowledged, however, that some of the challenges they are pointing out ... are known to us and are in fact valid."

Source: http://news.yahoo.com/africa-may-revisit-growth-outlook-strikes-cbank-083115971--business.html

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