INTERVIEW-South Africa strikes will hit GDP, but mining revenue up
NEW YORK, Oct 9 (Reuters) - South Africa's declining economic growth rates will continue to feel the impact of strikes in its key mining sector in 2013, even as mining revenues are expected to rise, Deputy Finance Minister Nhlanhla Nene told Reuters on Wednesday.
Africa's biggest economy has seen its growth rates trending down and forecasts for this year are for more of the same, Nene told Reuters on the sidelines of a UBS investment conference in New York.
Asked if the strikes, which have often turned violent, will have an impact on final gross domestic product figures for this year, Nene said: "Oh, we will take a hit."
Nene said that, while GDP growth is expected to drop, he would not provide an estimate given that the government is still working on its medium-term budget policy statement. But he prefaced this by saying the impact would not be as intense as in the previous fiscal year.
A Reuters poll of economists forecasts economic growth of 2.0 percent in 2013 and 3.0 percent in 2014.
South Africa's unemployment rate has been stuck at 25 percent for years, while a labor turf war in the mining sector retains the potential to destabilize the economy.
While a four week old strike in the auto components sector, which accounts for 6 percent of GDP, was settled this week, there remains work stoppage in the platinum mining sector.
Workers at Anglo American Platinum Ltd, the world's top platinum producer, have been on strike for more than a week in protest against planned job cuts that the company says it needs to return its operations to profit.
Amplats has suffered more than $40 million in lost output from the strike, with the AMCU union threatening to widen the labor action to other major platinum producers unless the mining company revises its plan.
Nene said the mining sector is seeing some stabilization.
"We are projecting a rebound in revenue," Nene said.
After slumping in May and June, mining production picked up in July. The gold strike that threatened to rock the industry turned out to be short lived and had little impact on production.
Gold producers and unions agreed to wage increases of up to 8 percent last month, ending a three-day strike. The settlement was slightly above the inflation rate, which has been at around 6 percent in recent months.
(Additional reporting by Jon Herskovitz in Johannesburg. Editing by Andre Grenon)