South Africa's economy has undergone nine consecutive months of recovery supported by both domestic and international demand, the South African Reserve Bank (SARB) said on Thursday as it launched its June Quarterly Bulletin.

Addressing a group of SARB employees as well as the media, Dr Monde Mnyande, adviser to the governor and chief economist, said that the further recovery in the first quarter of 2010 reflected the continued resurgence in most sectors of the economy, with mining playing a "remarkable role" alongside electricity, water and commerce.

Turning to what he called "the sticky unemployment state of affairs," Mnyande added that not one or two quarters, but a number of years of sustained strong growth was needed to address South Africa's unemployment predicament.

Mnyande said that the SARB's consumer price inflation (CPI) outlook indicated that inflation pressures remained relatively benign and the latest figure for May 2010 showed a further moderation of 4,6% from April's 4,8%.

"CPI is still expected to reach a low point in the third quarter of 2010 and the improved outlook for inflation is supported by the moderation in inflation expectations during the second quarter of 2010 as reported by the Bureau of Economic Research Inflation Expectation Survey published earlier this week."

Mnyande said that consumer inflation expectations on average had declined from 6,5% to 6,3% in the second quarter of 2010.

"Food price inflation is expected to remain subdued and the decline of petrol prices during June and possibly July will further help to alleviate inflationary pressures in the near term."

However, he added that rising administrative prices might still pose a risk to the inflation outlook.