IMF withdraws from Greek talks
THEINTERNATIONAL Monetary Fund’s team had left Brussels after failing to make progress on a debt deal to help Greece avoid default, it said. “The ball is very much in Greece’s court,” spokesman Gerry Rice said yesterday. “There are major differences between us.” The decision to withdrawcomes amid sharp criticism from creditors at the country’s refusal to bow to demands, risking an exit from the euro common currency. IMF head Christine Lagarde will meet EU finance ministers on June 18. – Bloomberg Jason Muscat, an economist at First National Bank, said: “We can’t be sure to what extent load shedding had an impact, but suppressed commodity prices would not have helped.
“With the upcoming gold industry wage negotiations, production levels could take a further hit should a swift and amicable resolution not be reached, putting further pressure on commodity exports.“
On a seasonally adjusted month-on-month basis, output fell by 4.1 percent in April, no doubt worsened by electricity supply cuts.
Azar Jammine, the chief economist at Econometrix, said: “Before one gets unduly despondent about this, one must bear in mind that the configuration of public holidays in April this year might have contributed towards depressing mining production.”
Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities, said the April mining production highlighted that, in spite of the various structural constraints to activity and weak global commodity prices, activity in the mining sector seemed to have found some stability since the fivemonth strike in the platinum sector last year.
“Indeed, this is supported through the pick-up in dry bulk export volume growth as reported by the Transnet National Ports Authority in recent months,” he said.
Uncertainty
Nevertheless, Schultz said he remained cautious over the outlook for the industry, given the uncertainty related to the outlook for commodity prices; electricity supply cuts, which were set to continue; the 10-day closure of Transnet’s iron ore export line in May; and negative comments surrounding the ownership criteria as stipulated in the mining charter.
“Upcoming gold negotiations are also to kick off in the next two weeks, which are likely to be met with challenges, given the rapidly changing face of South Africa’s labour union movement.”
Manufacturing production came out much weaker than expected, falling by 2 percent in April after increasing by an annualised 4 percent in March. This contrasts with market expectations of a 0.7 percent year-on-year rise.
The decline was mainly due to the large export-orientated and heavy energy industries, such as basic iron ore and steel, the petroleum and chemical products, radio and television, as well as the wood, paper and publishing industries.
Nicky Weimar and Dennis Dykes, economists at Nedbank, said the outlook for manufacturing remained subdued.
Kamilla Kaplan, an economist at Investec, said a sustained expansion in production growth was being hampered by electricity supply instability and rising energy costs.