Risks Of Strike Action Mounting

May 2008 | Ratings Update

As highlighted in last month's monitor, accelerating inflationary pressures in South Africa pose a risk to social stability by eroding people's disposable incomes, especially among poorer social classes. While not posing a risk to central government stability, rising prices significantly raise the risk of strikes by trade unions across the country, possibly negatively impacting production and putting upside pressures on wage demands. Indeed, the National Union of Metalworkers of South Africa announced in mid-April that it would consider strike action if employers refused to renegotiate wage contracts in May. The fact that headline inflation broke through the 10% mark and

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