Un­em­ploy­ment rate high­est since 2003

The Star Early Edition - - BUSINESS REPORT -

THE UN­EM­PLOY­MENT rate, which in­creased from 26.5 per­cent in the last quar­ter of last year, is the high­est since Septem­ber 2003, de­spite a rise in em­ploy­ment in fi­nance (152 000), man­u­fac­tur­ing (145 000), and con­struc­tion (143 000). Sec­tors that shed jobs were agri­cul­ture (44 000), trade (15 000) and gov­ern­ment (2 000).

On the other hand, the ex­panded def­i­ni­tion of un­em­ploy­ment, which in­cludes peo­ple who have stopped look­ing for work, in­creased to 36.4 per­cent. In the first quar­ter of this year, the num­ber of em­ployed in­di­vid­u­als in­creased by 0.9 per­cent on a quar­ter to quar­ter ba­sis and 3.4 per­cent year-on-year.

The un­em­ploy­ment rate has raised fears of a re­ces­sion.

In­vestec econ­o­mist, Kamilla Ka­plan said yes­ter­day that eco­nomic growth had es­sen­tially stag­nated in 2016 “and we fore­cast only a modest re­cov­ery in growth to­wards 2 per­cent by 2021. As such, un­em­ploy­ment rates are likely to re­main stub­bornly high.

“The re­cent po­lit­i­cal de­vel­op­ments and the sub­se­quent credit rat­ing down­grades are per­ceived to have height­ened pol­icy un­cer­tainty and fur­ther un­der­mined busi­ness con­fi­dence. This sug­gest that the prospects for a mean­ing­ful re­cov­ery in pri­vate sec­tor fixed in­vest­ment and em­ploy­ment are poor,” said Ka­plan.

Ka­plan said the In­ter­na­tional Mon­e­tary Fund had rec­om­mended that “the pri­or­ity to stim­u­late eco­nomic growth and job creation rests with struc­tural re­forms, no­tably in prod­uct and ser­vice mar­kets and in the labour mar­ket”.

She said the re­cent cab­i­net reshuf­fle and pre­vail­ing po­lit­i­cal tensions had raised con­cerns that the gov­ern­ment shift fo­cus from im­ple­ment­ing the re­quired struc­tural re­forms. This, she said, was a con­tribut­ing fac­tor to the sov­er­eign credit rat­ing down­grades by rat­ings agen­cies, Fitch Rat­ings and S&P Global Rat­ings. – Siseko Njobeni

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