South Africa Manufacturing Growth Slows to 0.4% in June

South African manufacturing growth unexpectedly slowed in June, undermining the outlook for Africa’s biggest economy.

Factory output expanded 0.4 percent, down from a revised 2.1 percent in May, Statistics South Africa said on its website. The median estimate in a Bloomberg survey of 11 economists was 4.3 percent. Output contracted 3 percent in the month.

“There was a little bubble up of output during the second quarter that was not the underlying trend” for growth, Peter Attard Montalto, an economist at Nomura Plc in London, said by phone. “We see South Africa at below potential growth into the second half of 2015.”

The South African Reserve Bank has kept its benchmark interest rate at 5 percent for a year as inflation pressures prevent it from cutting borrowing costs to stimulate the economy, which expanded in the first quarter at the slowest pace since a 2009 recession. Manufacturing makes up about 15 percent of the economy.

The rand rose 1.4 percent to 9.833 per dollar at 2:49 p.m. in Johannesburg. The yield on the benchmark rand bond due in 2026 dropped 4 basis points to 8.16 percent.

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