The Bureau for Economic Research (BER) has predicted that South Africa’s gross domestic product (GDP) is likely to grow by 2.7% this year and 3.5% in 2011. They did however note that the global economy could take another knock at the end of this year or at the beginning of 2011.

BER senior economist Hugo Pienaar noted that a reacceleration of price pressures at the end of 2009 would be temporary, with consumer price inflation (CPI) set to fall back into the 3% to 6% target band from February.

Weak domestic consumer demand, the sustained strength of the rand, lower wage increases and subdued global inflations would also contribute to lower domestic inflation, with CPI to average at 5,3% this year and at 5,9% next year.

The BER noted that the projections took into account 30% a year electricity price tariff increases for both years.

Reported by Engineering News