Continuing eurozone debt challenges, weak US growth and softer growth in emerging countries, such as China and India, were expected to moderate South African exports throughout the year, Bureau for Economic Research (BER) senior economist Hugo Pienaar said on Thursday.

According to the third-quarter BER Economic Prospects' report, strain in the global economy during the last half of 2011 negatively impacted on demand for domestic goods during the first half of 2012, which resulted in the year-on-year real-value-of-export-growth rate easing to 4.2% in the first quarter of the year, from 6.4% in the second half of 2011.

South Africa’s exports, of which 40% went to the European Union (EU), the US and China, in 2011, were not expected to contribute significantly to growth.

“In light of the downscaling in the global growth outlook, the forecast for real export growth in 2012 has been reduced by 0.5 percentage points,” Pienaar said, pointing to many forecasters, including the International Monetary Fund, readjusting their global forecasts for the next two years.

While the BER did not expect a “total EU breakdown” despite the increasing possibility of Greece’s exit from the union and a predicted recession for the eurozone, many advanced countries are seen to grow 1.5% to 2% during 2012/13.

South African gross domestic expenditure (GDE), however, was expected to experience weaker growth and has been downgraded to 3.9% during 2012, down from the 4.1% initially forecast in April.

Easing real consumer spending - in line with softer real disposable income growth and a softer employment outlook - was also constraining South Africa’s gross domestic product (GDP) growth.

The first quarter also revealed weaker private-sector investments as a number of uncertainties weigh on business sentiment, including global growth prospects and domestic policy uncertainty.

“The combination of slower GDE growth and net exports that subtract even more than before from output gives us GDP growth of 2.5% for 2012, down from 2.9% projected in April,” said Pienaar. He added that the growth forecast for 2013 was reduced to 3.3%.

He further commented that, while the key GDP components were expected to post faster growth in 2013, this year was expected to remain challenging.

Earlier this week, the World Bank lowered its GDP growth outlook for South Africa to 2.5%, from 3.1% in November, which prompted Business Unity South Africa to also reduce its outlook to 2.5%, from 2.7%.

Finance Minister Pravin Gordhan recently said that South Africa would likely miss government’s growth forecast of 2.7%.