Sub-Sahara Africa growth to slow to 1 pct: World Bank

JOHANNESBURG (Reuters) - Economic growth in sub-Saharan Africa should slow to 1.0 percent in 2009 from an estimated 4.8 percent last year, with regional powerhouse South Africa seen contracting by 1.5 percent, the World Bank said on Monday.

The bank said in its latest Global Development Finance report output and incomes in the region have been negatively affected by falling commodity prices and volume demand for metal and mineral exports as the global economic downturn weighs.

The World Bank warned that prospects for the global economy remained "unusually uncertain" despite recent signs of improvement in parts of the world and cut its 2009 growth forecasts for most economies.

South Africa fell into its first recession in 17 years in the first quarter of this year, as sliding domestic and world demand hit the key manufacturing and mining sectors.

In its February budget statement, the government forecast GDP growth of 1.2 percent this year, but the Treasury says this will likely be revised downwards in the October budget statement.

"Much of the decline in growth for 2009 reflects the sharp deceleration in investment and consumption activity that has already occurred," the World Bank report said, adding that growth should strengthen in sub-Saharan countries during the second half of 2009.

The recovery is expected to be relatively slow, partly because of a muted recovery in global export demand.

"While output growth will pick up in 2010 and 2011, the slow pace of the recovery will mean that spare capacity, heightened unemployment and weak government revenues will continue to characterise the economic situation," it said.

Growth in sub-Saharan Africa should pick up to about 3.7 percent in 2010 and 5.2 percent in 2011, as both domestic and external demand begin to recover. Output in South Africa should increase by 2.6 percent in 2010 and by 4.1 percent the year after.