Cape Town - The financial crisis is more or less over, reckons one of the country's top economists.

According to First National Bank chief economist Cees Bruggemans South Africa is not yet out of the financial woods, but the global negativity seen in recent months is unfounded.

However, the worst never happened. Governments and central banks have been showing the way, he explains.

Global recovery will be led by a strong East, with the West just now beginning to get back on its feet.

"Look, for example, at sales of passenger motor vehicles in China, which have grown an annualised 50%," Bruggemans points out.

He predicts that South Africa's gross domestic product will shrink by 1.5% this year. But next year it will grow 2% to 3%. Consumer price inflation (CPI) will average 7% this year, but drop to 5% in 2010. Exports will increase 2% to 4% next year, and the prime lending rate will be 11%.

Bruggemans does not believe the Reserve Bank will rush to change the prime rate. "I think they have done everything they want to for now."

Next year, he believes, the rand will trade at an average R7.70 to the dollar.

"The reality is that from now countries will be developing aggressively."

Trade unions and rising oil and food prices could put South Africa under pressure next year, but a strong rand and an anticipated recovery in resources prices will count in the country's favour. - Sake24.com For more business news in Afrikaans, go to Sake24.com