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By Benedicte Gravrand, Opalesque London:

The chief economist and the currency strategist at South Africa's Rand Merchant Bank (RMB) gave Opalesque their views and outlook on the region's economics.

South Africa

South Africa (S.A.), an emerging country with a business cycle closely tied to the global cycle, has been negatively affected by the financial crisis, according to RMB's chief economist Ettienne le Roux.

The channels of contagion can be seen through its exports. S.A.'s exports of commodities and manufactured goods, which account for about 30% of GDP, are mainly to the developed world, which is has been buying less. So exports have come down significantly, impacting the economy at large.

"We've already seen this in typical industries, mining in particular," he said. "The mining output has contracted significantly as has manufacturing output. Here we are talking about gradual decline in the case of mining in the order -5% y-o-y and in the case of manufacturing, it is as much as -15% y-o-y."

Being labour-intensive, the mining and manufacturing sectors are shedding jobs and that will affect consumer expenditure.

The timing of the global financial crisis was particularly bad, Le Roux observed, because it came at a time when S.A. growth and consumer spending had already been slowing down for more than a year. There was a boom period not so long ago: between 2004 and 2007, consumers borrowed and spent to unsustainable le......................

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