CEOAFRICA News, according to Reuters, reports that recent South African data points to economic growth projections for this year being cut, while sharply rising labour costs because of high wage settlements pose an inflation risk, the South African Reserve Bank said.

“The risk to economic growth lie to the downside as a result of the potential for further job and output losses, particularly, in the mining sector” the central bank said in its bi-annual review of monetary policy.

CEOAFRICA News, as reported by Reuters indicated that the banks said there was “real wage rigidity” in the economy, despite signs of the economy struggling to create jobs and growth.

Headline consumer inflation in South Africa has been just below the bank’s 3-6 percent target for the past three months.

Further reports reaching the news desk of CEOAFRICA from Reuters is that imported price pressures are increase due to a sharp fall in the rand which lost about 13 percent against the dollar last month as foreign investors worried about often violent mining labour unrest dumped the currency and local debt. A reduction in the pace of capital inflows to South Africa would affect the value of the currency, and undermine the sustainability of the current account deficit, with potentially serious implications, the Central bank said.

South Africa has a yawning current account shortfall of over 6 percent of GDP, which has historically been funded by portfolio inflow.