South Africa Unemployment Rate Declines to 24.5% in Q4
South Africa's jobless rate dropped to 24.5% in Q4 as there has been an employment increase in the finance industry that counters job losses in agriculture and construction sector.
A report from the Statistics South Africa that was released Thursday, the unemployment dropped to 25.5% in the previous three months. The average estimates of seven economist gathered by Bloomberg was 25.6%. The number of unemployed people is reduced by 225,000 to 5.2 million.
Since the 2009 recession Africa's second largest economy strife to push employment with the country having the highest rate of unemployment. The continuous drop in commodity prices, increasing wage demands and drought that lasts for more than a century hinders job opportunities.
"Job creation remains one of the most pressing concerns for the economy," the National Treasury said in the Budget Review tabled by Finance Minister Pravin Gordhan in Cape Town on Wednesday. "Given the large number of jobless South Africans and the increasing skills intensity of production, policy interventions to support sectors that can create jobs for low-skilled workers are critical."
The economy will likely enlarge to 0.9% this year which is the slowest rate of movement since the recession, the government said. On Wednesday, Finance Minister Pravin Gordhan announced that the state will reduce spending targets by 25 billion rand during the next three years, primarily by lowering the wage bill by slashing posts in the civil service that are not filled or non-critical, according to the Daily News.
Since the end of apartheid in 1994, the government has become dependent on producing jobs through civil service employment. It recently attached a plan to produce 1 million job 'opportunities' to large, government-led infrastructure programs. Due to revenue drop and warnings given by rating agencies to cut expenditure or face credit downgrades, blocked the plans. The economy shows signs of constriction, with consumer inflation of 6.2% and producer prices of 7.6%, reports Reuters Africa.
South Africa's jobless rate slightly went down late last year but is expected to rise again as major sectors cut workforce and the government slash expenditure and economic growth stalls. Stats SA informed that only 16 million out of 36.3 million of the working-age population had jobs.