Gross Domestic Product is expected to decline by 0.8 percent in 2009, the Bureau for Economic Research said on Thursday.

GDP was expected to "recover moderately" to a growth rate of 2.5 percent in 2010, the bureau's director Professor Ben Smit said in a speech prepared for delivery at a BER conference in Johannesburg.

"Employment, which tends to lag output growth, is expected to reflect similar trends, declining by 2.2 percent in 2009, recovering marginally – by 0.7 percent – in 2010."

Turning to inflation, he noted that the newly-revised consumer inflation measure had already declined substantially from its peak of 13.7 percent in August 2008.

"The BER's forecast for inflation indicates an average of 6.8 percent in 2009, dipping below six percent in August but ending the year back at 6.9 percent."

Thereafter inflation was expected to move back to within the three-to-six percent target range, averaging 5.3 percent in 2010.

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