SOUTH Africa's economic outlook is deteriorating rapidly, with unrest in the mining sector and national transport strikes likely to lead to job losses, central bank governor Gill Marcus said yesterday.
Speaking to economics students in Grahamstown, Marcus reiterated her stance that the Reserve Bank had no target level for the rand.
A heavy fall in the currency on Monday, to within a whisker of R9 to the dollar, had prompted market speculation of official intervention.
Two months of violent, wildcat walkouts in gold and platinum mines, including the killing of 34 strikers at Lonmin's Marikana mine in North West on August 16, had hurt South Africa's international investment reputation, Marcus said, citing R5.6-billion in net equity market outflows on Monday as evidence.
"That's ... a huge indicator for us of loss of confidence," Marcus said. "The outlook at the moment is deteriorating rapidly and if you look at the deficit of confidence, it is one of the reasons why it's very difficult to find a resolution."
Besides the mining problems, a strike by more than 20000 truckers has entered its third week, hitting fuel supplies around Johannesburg and affecting production at some car plants in coastal cities, including Nelson Mandela Bay.
Talks between the main transport union, the South African Transport and Allied Workers' Union (Satawu) and freight employers broke down on Tuesday. The transport strike is due to widen next week with a "sympathy" stoppage by port and railway workers.
Meanwhile, Finance Minister Pravin Gordhan said yesterday labour strikes in the mining sector had hurt the rand but he expressed confidence that the currency would bounce back.
"The initial stage of the [rand] depreciation, clearly gloomy news coming from Europe, has impacted in our situation," Gordhan said ahead of meetings of the International Monetary Fund (IMF) and World Bank in Tokyo.
"And I'm sure [that over] the last 10 days or so, sentiment must have been impacted by the strikes in our country as well. But I'm sure we'll bounce back and get to some level of new normality."
Gordhan said the government had taken steps to address the labour unrest, stressing that South Africa was still "a prime nation" for investment.
"I want to assure everyone concerned that the government as a whole is putting in immense efforts to bring together the employer community, trade union movement and the government itself in order to stabilise the situation as rapidly as possible," he said.
Gordhan acknowledged that the strikes would affect the economy in the short term but said South Africa had programmes to ease such adverse effects. – Reuters
