Finance Minister Trevor Manuel yesterday gave a bullish assessment of the country’s prospects, saying South Africa will weather the global financial crisis well, despite a sharp slowdown in economic growth over the next two years.

The economy’s current budget surplus would swing back into a deficit next year during the 2009/10 fiscal period, said Manual, though he hinted at a possible return to a balanced budget in 2011/12, if the global economy and commodity prices recover.

Manuel also forecast inflation to fall back to its target range by the third quarter of next year, sooner than the Reserve Bank has previously suggested, following the recent plunge in oil prices.

“We remain pretty confident that by the third quarter of next year we will see inflation inside its target band,” he said.