Economic recovery is fragile, uneven- Marcus

Wednesday, July 7, 2010

Pretoria - Recovery from the global financial crisis is fragile and uneven says Reserve Bank governor Gill Marcus.

"The recovery is taking place, but it is hesitant, fragile and uneven. Its sustainability will be dependent on the global recovery in general and in Europe in particular, which is the destination for about one third of our manufactured exports, as well as how effectively we use those opportunities that are there to enhance our economic infrastructure and human capital capacity," Marcus said on Wednesday.

She said although South Africa's exposure to Southern European countries is relatively small (at about 5 percent) Europe as a whole accounts for about one third of South Africa's manufactured exports.

"A slowdown in the euro area as a whole will not be inconsequential for South African exports," she said.
She however added that growth has improved but that the output gap remains wide and is likely to take some time to get back to pre-crisis levels of output.

"While the growth outlook remains positive, our growth is expected to remain much slower than that in many other emerging markets," she said, adding that some analysts had downgraded their quarterly growth forecasts for the year.

The central bank still expects growth to average around three per cent in 2010.