End of SAfrican recession in sight

But not soon:

SAFRICA: Major world economies are pulling themselves out of recession, but regional powerhouse South Africa is lagging behind the global recovery, though analysts say the end may be in sight.

South Africa’s economy contracted by 3.0 percent in the second quarter, a less dramatic drop than the first quarter’s 6.4 percent dive.

“The end of the recession is in sight. The degree of decline we saw in the second quarter is better than the previous one,” said Jac Laubscher, Sanlam group economist.

He said the economy would continue to stabilise during the rest of the year, but that recovery would only begin in the second half of 2010.

If South Africa is slow to recover, it was also slow to see the effects of the financial turmoil that roiled the world last year.

With sound banks and sober state spending, South Africa weathered the first months of the financial crisis, until reduced global demand finally took a toll on its mining and manufacturing exports the two biggest sectors of the economy. South Africa officially entered recession in May, its first in 17 years.

The first quarter decline was driven by a record fall in manufacturing, which shrank 22 percent, hit hard by the slow demand for exports and poor consumer spending. In the second quarter, manufacturing clawed back but still declined 10.9 percent.

Mining showed slim growth of 0.3 percentage points in the three months to June, also better than the previous posting but coming off more than a year of heavy declines.

Housing, retail and vehicle sales have plunged since the beginning of the year.

JOHANNESBURG, Friday, AFP