UPDATE 2-Weak GDP, high inflation keep S.Africa interest rates steady
By Xola Potelwa
JOHANNESBURG, Sept 19 (Reuters) - South Africa's central bank left interest rates unchanged on Thursday but cautioned about the impact of strikes on economic growth and inflation as the economy comes out of its annual wage negotiating season.
"While the outlook for the domestic economic growth environment remains unchanged, it has been overshadowed by protracted work stoppages," Governor Gill Marcus said in her fifth monetary policy statement of the year.
July, August and September tend to be volatile months in South Africa's labour market as workers push for higher wages in what has become known locally as "strike season".
However, apart from a stoppage by car parts workers, this year's strikes have been relatively short-lived and violence-free. More than 50 people died in last year's mining sector clashes, including 34 shot dead by the police.
This year miners in the gold industry went back to work after a three-day stoppage, although their 8 percent wage settlements are likely to cost bullion producers an extra $150 million over the next 12 months.
Car parts workers are still on strike, shutting down some factories in a sector that accounts for 6 percent of output in Africa's largest economy and 12 percent of exports.
The central bank forecast economic growth of 2 percent this year, unchanged from the previous meeting, compared with 2.5 percent in 2012 - still too low to generate enough jobs to bring down the unemployment rate of 25.6 percent or to reduce widespread underemployment.
It also kept its inflation forecast unchanged at an average of 5.9 percent in 2013, but nudged its predictions up slightly for 2014 and 2015.
Marcus said the above-inflation wage agreements reached in some sectors, including gold mining, would contribute to the upside risk to the CPI outlook.
Consumer prices broke through the central bank's 3-6 percent target for the second month in August, but the bank said that was likely to be the peak.
The MPC also cautioned against inflationary risks from higher oil and food prices and a weak rand exchange rate.
Although bolstered by the Federal Reserve's surprise decision on Wednesday to maintain its bond-buying programme, the rand is still down 15 percent against the dollar this year, causing the bank to worry about imported inflation.
The bank's assumptions were made before the Fed decision to stay put on its monetary stimulus, but the reprieve enjoyed by emerging markets is expected to be temporary.
All 25 economists surveyed by Reuters last week had expected the South African central bank to keep its rates on hold. No move is expected before the second quarter of next year. (Reporting by Olivia Kumwenda-Mtambo and Helen Nyambura-Mwaura; Editing by Ed Cropley/Ruth Pitchcford)
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