The International Monetary Fund (IMF) has lowered its growth forecast for SA this year and warned that the economy could "underperform" if labour unrest persists and the business environment deteriorates.
There is widespread concern that there will be more turmoil in the mining sector when wage negotiations in the gold and coal industries start in April.
A decision by Anglo American Platinum to cut 14,000 jobs after mothballing shafts and suspending processing plants sparked a short, illegal strike last week.
President Jacob Zuma insisted on Wednesday at the World Economic Forum in Davos, Switzerland, the worst of the labour unrest was over. "Yes, we have seen the worst, we are dealing with the matter."
› No plans for mining tax hikes, says Gordhan
› Residents vow to vote ANC out of power
Business, labour and the government were discussing the issues involved as SA could not go back to a situation which created the impression that it had no governance, Mr Zuma added.
In its latest World Economic Outlook released on Wednesday, the IMF revised its growth forecast for SA this year down to 2.8 percent from a 3 percent estimate in October.
The IMF’s senior resident representative in SA, Axel Schimmelpfennig, said on Wednesday that one of the reasons for the revision was the fact that labour unrest was continuing longer than the IMF had previously factored in, affecting production, exports and investor confidence.
"We continue to assume that these effects are temporary. However, our forecast is subject to significant downside risks and if the labour unrest persists and the business environment deteriorates, SA’s growth could underperform," he said.
The Washington-based lender revised its growth forecast for SA next year up by 0.3 percentage points to 4.1 percent — well above market consensus and official estimates.
The Treasury sees the economy expanding by 3.8 percent next year, while the Reserve Bank expects growth of 3.6 percent.
Mr Schimmelpfennig said the optimistic estimate reflected an "anticipated rebound" from this year, but was subject to the "same downside risks" from labour unrest.
Article continues on page two...