Oct. 22 (Bloomberg) -- South Africa’s economy will probably shrink about 2 percent this year after the global financial crisis had a “formidable impact” on developing countries, Finance Minister Pravin Gordhan said.

The National Treasury will give more details of the forecast in its mid-term budget report on Oct. 27, Gordhan said in a speech in Cape Town today.

Africa’s biggest economy plunged into its first recession in 17 years in the fourth quarter of 2008 as manufacturing exports collapsed, pushing the unemployment rate to 23.6 percent, the highest of 62 countries tracked by Bloomberg. Gordhan’s forecast is in line with estimates from the International Monetary Fund, which said on Oct. 1 that the economy will contract 2.2 percent this year.

The global financial crisis “has had a formidable impact on developing countries,” Gordhan said. “In South Africa we were doing quite well, as a modest economy so to speak, with average growth of about 5 percent in the last five years. For this year, we will probably be closer to minus 2 percent.”

This year’s contraction will be the first since 1992, when the gross domestic product shrank 2.1 percent.

The economy has been slow to recover from recession as consumers curb spending and the rand’s 40 percent surge against the dollar since March hurts exports. GDP contracted an annualized 3 percent in the second quarter after shrinking 6.4 percent in the previous three months.

Consumer Laggards

“Consumers are going to be the laggards in this recovery,” said Jean-Francois Mercier, an economist at Citigroup Inc. in Johannesburg. “Businesses have been cutting back aggressively on the jobs front. Real income has been under pressure.”

The economy shed 267,000 jobs in the second quarter, according to the statistics office. Simmer & Jack Mines Ltd., which mines gold in South Africa, said on Aug. 31 it may cut as many as 2,500 jobs, or almost half of workers at its biggest mine. Anglo Platinum Ltd., the world’s largest producer of the metal, is firing about 10,000 workers.

The rand was at 7.5009 against the dollar as of 2:51 p.m. in Johannesburg, from 7.4755 before Gordhan’s comments. The yield on the R157 government bond, due 2015, climbed 9 basis points, or 0.9 percentage point, to 8.671 percent.

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net; Nasreen Seria in Johannesburg at nseria@bloomberg.net

Last Updated: October 22, 2009 08:59 EDT