There is a 60 percent chance another rate cut could be on the cards in South Africa, a leading economist told I-Net Bridge on Tuesday.

Chief economist from Brait, Colen Garrow, said in an interview that a 50 basis point cut ? which would take the repo rate to 6.5 percent ? might happen in the first quarter of next year, i.e. at either the January or March Monetary Policy Committee meeting.

"I'm hopeful. It will put a bit of a brake on rand strength and that's one way of doing it. They should be looking at that quite closely," said the economist.

Garrow says that while the GDP growth trend is higher, the concern is about how sustainable the recovery will be.

He says he has pencilled in a more bullish than consensus expectation for growth of 3.3 percent next year. Consensus is at around 2.6/2.7 percent.

A 'double-dip recession'?

"It could go higher, but will not be sustainable if the global recovery falters," said Garrow.

The economist feels there is a chance that the global economy experiences a "double-dip recession of sorts", with the next leg less severe a contraction than the first part.

"This could happen when the G20 starts withdrawing stimulus and South Africa will follow that weakness," said Garrow.

3 consecutive quarters of negative growth

South Africa's real gross domestic product (GDP) at market prices on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis rose by 0.9 percent in the third quarter of 2009 from a revised -7.4 percent (?6.4 percent) in the first and a revised -2.8 percent (?3.0 percent) in the second quarter. This snapped the first instance of three consecutive quarters of negative growth seen since the fourth quarter of 1992.

South Africa's unemployment rate, however, increased to 24.5 percent in the quarter ended September 2009 from 23.6 percent in the second quarter.

The South African Reserve Bank's (SARB's) Monetary Policy Committee on November 17 decided to keep the repo rate unchanged at 7.0 percent.

The increase in South Africa's consumer price index (CPI), which is used by the SARB for its inflation target, was up 5.9 percent year-on-year (y/y) in October from 6.1 percent y/y in September.