South Africa’s economy is set for a recovery next year, according to one economist at Rand Merchant Bank, with growth of 2.5% pencilled in for 2010.

Ettienne Le Roux, senior economist at RMB, made the prediction at the annual conference of the Steel and Engineering Industries Federation of SA, in Johannesburg last week, reports Business Report.

Le Roux also noted that the growth rate should not be considered a bad performance in light of “the global downswing."

The growth, whilst still muted in comparison to the rate of economic growth in recent years, would mark a turnaround from current conditions. South Africa’s economy contracted by 1.8% in the final three months of 2008.

"The many shock absorbers we have in place -- such as a flexible rand exchange rate, counter cyclical policies, lower inflation, a social safety net, falling interest rates and infrastructure spend -- these won't prevent recession in SA," added Le Roux.