The South African Rand has weakened against the US Dollar and Sterling after the latest gross domestic product data showed that Africa’s largest economy grew by 3%, less than the 3.3% increase called for by economists.
According to Statistics South Africa the 3% rise is the fastest pace of growth in a year and far ahead of the 0.9% recorded in the first three months of the year.
The South African economy has suffered from ongoing labour strife and a slump in business confidence that may limit growth in the second half of the year. Labour disputes in the key mining sector saw it contract by 5.7% in the second quarter from the previous three months. Other sectors hit included agriculture which declined by 3.7% and the auto industry also made losses as strike action impacted production. Manufacturing however jumped by 11.5% as production rebounded from the first quarter.
“A stronger GDP print should not be taken as a signal of strengthening growth momentum, but rather as a statistical bounce,” Absa Capital said in a research note.
Ongoing worker problems were compounded on Monday after Construction and airport workers went on strike for higher wages, joining those in the car manufacturing sector who downed tools last week. There are also ongoing threats of strikes in the gold mining sector, which could cost over $35m a day in lost output, after wage talks between the National Union of Mineworkers and gold mining companies were deadlocked.
Current South African (ZAR) Exchange Rates:
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.3658 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.0790 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.8311 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.2788 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.0747 >
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.8469 >
(Correct as of 12:25 pm GMT)
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