Johannesburg — GROSS domestic product (GDP) figures out today may show that SA is out of recession.

Analysts' forecasts for third- quarter GDP vary widely, with some predicting a fall of 1,2% and others a rise of 2% compared with the previous quarter.

But a figure above zero will mean the country is technically no longer in recession, after contracting for three quarters in a row.

Brait economist Colen Garrow said that while the economy was still very weak, emerging from a recession was an important positive psychological factor.

Econometrix economist Tony Twine said he expected GDP to be either "close to negative or close to positive".

GDP is expected to have been boosted by infrastructure spending in preparation for the 2010 Soccer World Cup and a rebound in manufacturing activity.

Construction has also expanded more than 10% in the first half as the government spends billions on large infrastructure projects such as the Gautrain, stadiums and roads. That has cushioned the economy while manufacturers begin to recover from a collapse in exports.

Garrow said today's data may include higher than expected revisions of previous GDP statistics, which may cause third- quarter GDP to be lower than expected. He expected to see stronger GDP growth from the fourth quarter.

Investec Group Economics economist Annabel Bishop expected a small quarterly contraction of 1,2% in the third quarter, which would still be good news as it represented a slowing in the pace of the contraction.

She said fourth-quarter GDP might be "marginally positive", followed by 2,2% growth in the first quarter of next year , and 3,4% growth in the second quarter.

Adding to positive sentiment was yesterday's release by the Reserve Bank of SA's leading business cycle indicator.

The indicator for September recorded a month-on-month increase of 1,9% to 114,6. This was the sixth successive monthly rise, which pushed the annual rate of change to +0,3%, compared with -3,5% in August.

The business cycle indicator consists of 13 subindicators such as opinion surveys, indicators of major trading partners and other items such as labour productivity in manufacturing. It predicts trends in six to 12 months.

Stanlib economist Kevin Lings said this was the first time since the middle of 2007 that SA's leading indicator had been positive on a year-on-year basis.

There was a good relationship between the indicator and economic activity, Lings said, suggesting "the South African economy should recover more fully into 2010".

Garrow said the leading indicator was a "fairly reliable indicator of where things are going", but he warned about a "double dip" in the global recession , which some commentators had speculated about.

That may affect SA's GDP growth prospects.

Bishop said the upward trajectory of the indicator since March was a "fantastic outcome".

SA would probably lag the global recovery by one or two quarters, due to the timing of the recoveries of its key trading partners, she said.

"This retarding effect is proving to be far more significant in driving SA's recession than the previous interest rate hikes, although the institution of the National Credit Act is playing a significant role," she said.

Consumer price inflation (CPI) data are expected to be released tomorrow, and producer price index (PPI) data on Thursday.

Economists predict CPI may come in at 5,9%, within the Reserve Bank's 3%-6% monetary policy target. A lower CPI will be good news as the Bank has faced criticism for being too fixed on its monetary policy targets.

Consensus forecasts on the PPI point to a 3,1% decline compared with the corresponding month a year earlier. The expected decline is a bit slower than the 3,7% slide in September. With Bloomberg