S.Africa seen out of recession, CPI back in target

By Stella Mapenzauswa

JOHANNESBURG (Reuters) - South Africa's economy likely registered slight positive growth in the third quarter of this year, coming out of recession after 3 consecutive quarters of contraction, a survey showed on Friday.

The economy lurched into recession in Q1 for the first time in 17 years when GDP shrunk by 6.4 percent after a previous 1.8 percent decline as a global downturn hit the key manufacturing and mining sectors. It dipped 3.0 percent in the second quarter.

The median consensus from a Reuters poll of 17 economists showed the GDP number probably recovered to 0.2 percent in the third quarter, effectively ending the recession.

Forecasts ranged between a contraction of 1.2 percent and positive growth of 2.0 percent.

Both the National Treasury and the central bank expect South Africa's recession to end in the fourth quarter, with an overall contraction of 1.9 percent seen for 2009 after the economy grew by 3.1 percent last year.

"We expect to see the domestic economy moving out of recession in Q3'09 albeit at a moderate pace and we expect this to recovery to gather momentum into the new year," said Luke Doig, senior manager for investments and economic services at Credit Guarantee Insurance Corp.

Both gold mining and manufacturing most likely posted positive quarter-on-quarter growth rates in Q3, but evidence of still-sluggish growth elsewhere would offset this, said Standard Chartered's Razia Khan.

"While agriculture could prove to be the swing factor -- it is always difficult to predict -- it is likely that quarter-on-quarter growth was flat," said Khan, Africa head of research at the bank, one of 4 analysts who forecast 0 percent growth for Q3.