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Geneva - South Africa still expects its economy to grow in 2009 despite a contraction in the fourth quarter of last year, Deputy Trade and Industry Minister Rob Davies said on Monday.
"Even if we were to end up with two negative quarters in a row we're not envisaging the whole year will be negative at this point," he told Reuters.
Davies, who said the bottom of the global economic crisis was not yet visible, said the main macroeconomic challenge for South Africa is its current account deficit.
South Africa announced on Friday a record trade deficit for January and its first drop in gross domestic product (GDP) for a decade in the fourth quarter of last year, as the global crisis hammered its manufacturers.
Davies said that even if first-quarter GDP turned out to have contracted, the budgeted full-year 1.2% expansion still looked realistic.
He said the trade deficit would start to correct itself in the next few months as a result of slowing consumer demand, which is depressing imports, and of the weaker rand.
The decline in export earnings largely reflects falling earnings for mineral exports.
The price of many minerals has declined, with demand for instance for platinum - used for catalytic converters in the automobile industry - dropping as car sales slump.
Africa's biggest economy is fairly well cushioned against the worldwide crisis because of a recently re-affirmed $787bn infrastructure programme, Davies said.
This is already delivering stadiums and road upgrades in the run-up to next year's soccer World Cup, and is due to provide new power stations and road, rail and port upgrades by 2012.
"There are fairly good reasons to anticipate that 2010, whatever the state of the world economy, will still deliver a bonanza to us in terms of our hosting the soccer World Cup," Davies said.
"I think that even if the world economy is very depressed, people will still want to come and watch that and that will be a big significant injection and confidence-building exercise for us," he said.
- Reuters