City Press writes that the economy grew in the second quarter of this year and the SA Reserve Bank forecasts growth of 5.3% for the year, but ever more people are losing their jobs.
PwC chief economist Lullu Krugel says two-thirds of job creation is related to the country’s GDP performance, but factors such as uncertainty about the pace of economic recovery, continued load shedding, rumours of tax increases to fund social spending and the slow progress of Covid-19 vaccinations also play a role. This is evident from the 65,000 jobs lost in the second quarter of this year. A contributing cause was that rolling blackouts implemented by Eskom in the first six months of the year were 13% higher than in the corresponding period last year. Krugel noted: “Although these additional factors have a smaller impact on employment figures than growth, they currently weigh so heavily in South Africa that they prevent companies from employing more people.” According to Professor Raymond Parsons of the North West University Business School, unemployment will remain high for a long time to come because economic growth rates for next year and 2023 are barely above the level of population growth. “South Africa needs growth of 3% per year if we want to make a dip in unemployment,” he pointed out. On Thursday, the SA Reserve Bank adjusted its growth expectation for next year and 2023 downwards to 1.7% (from 2.3%) and 1.8% (from 2.4%), respectively.
- Read the full original of the report in the above regard by Riana De Lange at City Press (subscriber access only)
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