Has unemployment in SA stabilised?
The slight better news on the unemployment front is a welcome trend, as it comes after a prolonged period of persistent deterioration in SA employment levels in recent times. To a large extent this development follows SA’s strong economic recovery in 2021 from the previous pandemic lockdowns, in view of the inevitable time-lags.
It is not yet clear, however, whether the latest improvement in the employment situation will be sustained in the months ahead, given the renewed negative global and domestic economic trends that have emerged in the second quarter of 2022. The risk now is that these factors may yet put a spoke in the wheel of the jobs recovery.
There is nonetheless the hope that on certain favourable assumptions unemployment in the country may well now have stabilised at an elevated level. SA’s jobless rate is nevertheless still among the highest in the world. The massive youth unemployment in SA also remains a big challenge and highlights the scale of what job-creating measures are needed to remedy the situation. The latest unemployment figures again confirm that SA needs GDP growth rates of 3%-4% to make a serious dent on unemployment levels.
On the present economic trends GDP growth in 2022 is now likely to be about 1.6%. SA therefore needs to break out of its ‘low growth trap’ by collectively expediting the urgent implementation of key economic reforms. SA still needs to maximise the number of jobs created at any given growth rate.
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