Expansion of 3% gets the economy going, but it will not bring unemployment down.
SA’s economy needs to expand consistently at 5% for years to create jobs and lower an unemployment rate that’s among the world’s highest, according to Reserve Bank deputy governor Rashad Cassim.
For an economy that expanded at an average rate of 1% in the past decade and is being buffeted by rolling electricity outages, labour unrest and transport bottlenecks, accelerating growth to 5% may be a challenge.
“Going from a 1% economy to 3% isn’t rocket science” for SA, Cassim told reporters in Johannesburg on Tuesday.
“Unfortunately, 3% gets the economy going, but it will not bring unemployment down. To get unemployment down, we really need systematic 5% growth every year and that’s a different debate.”
Load-shedding reached a record in 2022 and is deterring companies from expanding and adding jobs. Rising labour and utility costs spurred Sibanye Stillwater, SA’s second-largest precious-metal miner by sales, to consider cutting about 2,000 jobs at some of its gold mining operations.
The unemployment rate is now 33.9% — the highest on a list of 82 countries and the eurozone monitored by Bloomberg.
The International Monetary Fund projects the nation’s jobless rate will reach 35.2% in 2022, the highest in the world, though data for some countries is unavailable.
Bloomberg
