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Johannesburg - Moody's Analytics has revised downwards South Africa's growth forecast for 2010 and 2011.
Moody's Analytics now expects the local economy to expand 2.6% in 2010 and 3.1% in 2011 from previous estimates of 3.0% for 2010 and 3.4% in 2011.
Government says the economy is likely to grow by 3.0% in 2010, the same as the consensus forecast among economists.
Moody's Analytics' revision is based on "manufacturing's fatigue" and a more pessimistic outlook for Europe in 2011. Europe is South Africa's largest export market and negative economic developments in that region affect local growth.
"The uncertain global outlook tilts the balance of risks to the downside for South Africa," Teshome noted.
The global recovery is expected to decelerate into 2011, Moody's Analytics economist Mekael Teshome said in a report.
Teshome explained that the US has lost momentum while growth in most emerging economies is cooling towards more sustainable rates.
Europe also remains weak and prone to setbacks, according to Teshome. Moody's Analytics expects a mild recession in the region in 2011.
Expectations are for interest rates to be held steady until at least the third quarter of 2011, while inflation is forecast to remain "comfortably" within the SA Reserve Bank's 3%-6% target band.
Official figures show that growth in South Africa slowed even further in the third quarter, from a revised 2.8% (3.2%) in the second quarter to 2.6% in the third.
Moody's Analytics now expects the local economy to expand 2.6% in 2010 and 3.1% in 2011 from previous estimates of 3.0% for 2010 and 3.4% in 2011.
Government says the economy is likely to grow by 3.0% in 2010, the same as the consensus forecast among economists.
Moody's Analytics' revision is based on "manufacturing's fatigue" and a more pessimistic outlook for Europe in 2011. Europe is South Africa's largest export market and negative economic developments in that region affect local growth.
"The uncertain global outlook tilts the balance of risks to the downside for South Africa," Teshome noted.
The global recovery is expected to decelerate into 2011, Moody's Analytics economist Mekael Teshome said in a report.
Teshome explained that the US has lost momentum while growth in most emerging economies is cooling towards more sustainable rates.
Europe also remains weak and prone to setbacks, according to Teshome. Moody's Analytics expects a mild recession in the region in 2011.
Expectations are for interest rates to be held steady until at least the third quarter of 2011, while inflation is forecast to remain "comfortably" within the SA Reserve Bank's 3%-6% target band.
Official figures show that growth in South Africa slowed even further in the third quarter, from a revised 2.8% (3.2%) in the second quarter to 2.6% in the third.
