The uneven recovery in global economic growth seen in the second half of 2012 was likely to continue into 2013, resulting in only a modest pickup of 3.3% in gross domestic product (GDP) growth for the year, Absa Asset Management Private Clients general manager Craig Pheiffer said on Wednesday.

“Recession risks for the year are less cautious than one would think,” he added.

He expected continued growth of 6.7% from emerging Asian countries, including China, India, Indonesia, Malaysia and Singapore, to be the primary drivers of global economic growth.

Overall growth of 5.4% was expected from developing countries, while developed States’ economies would expand by some 1.3%.

Meanwhile, increased net exports from South Africa could drive the country’s economic growth to 2.8% in 2013 – marginally up from the 2.5% growth expected for 2012.

He said that, while he expected modest growth, South Africa’s year ahead would ultimately be determined by the ability of government to react to increasing social tensions, which would result in higher spending pressures and reduce the fiscal flexibility of the State.

Ratings agencies Standard & Poor’s and Moody’s recently downgraded the country’s investment grade to BBB and Baa1 respectively, citing the reduced capacity of the State to tackle political and social tensions.

“Government seems to be ‘running out of road’ required to sort out the problems,” said Pheiffer.

He expected a continued slowing of retail sales across all sectors, as households reacted to sustained economic uncertainty and consumer confidence remained low.

Meanwhile, manufacturing seemed to have contributed more to the December quarter, while exports picked up on the back of a weaker rand and could continue to do so into 2013.

Looking abroad, further contraction in the eurozone in the fourth quarter of 2012 could be followed by a modest recovery in the core regions, leaving overall growth flat in 2013, Pheiffer added.

“The European economy should remain stagnant for 2013, but will not be in a recession,” he noted.

Meanwhile, Pheiffer expected a “slow and grinding” recovery for the UK and moderate growth of around 2% for the US in 2013, but added that this would be lower than the growth levels seen in 2012.

He added that stagnant output from the UK, coupled with spare economic capacity, suggested further monetary policy easing in 2013, but noted that inflation was above target and food prices continued to rise.

Declining household income in the US was expected in the first quarter owing to slow growth, with a low recession risk as a result of overall business and household spending caution.

Meanwhile, recent economic data out of China had surprised on the upside, boosting optimism in the economic growth recovery and, while caution about this region was still warranted, Pheiffer expected 2013 GDP growth to be a solid 8%.