South Africa: Unemployment Rate Increases in Q3 to 27.5%

Platinum Mine strikeSouth Africa’s rand dropped beyond 11 per dollar for the first time since 2008 last week, reaching 11.1949 on Jan. 24 amid concern a strike at the world’s biggest platinum mines will dent exports. Photographer: Alexander Joe/AFP via Getty Images
  • South Africa: Unemployment Rate Increases in Q3 to 27.5%

South Africa, Africa’s second-largest economy,’s unemployment rate has climbed slightly in the third quarter (Q3), according to the data from Statistics South Africa (Stats SA).

The Statistician-General of South Africa, Risenga Maluleke, announced on Tuesday that unemployment rate climbed by 0.3 percent to 27.5 percent in the third quarter of 2018.

The unemployment rate was 26.7 percent in the first quarter before rising to 27.2 percent in the second quarter and now sits at 27.5 percent amid the economic recession.

Maluleke said out of the 38 million working-age people in South Africa, 16.4 million people are employed, while 6.2 million are unemployed and the remaining 15.4 million are classified as economically inactive.

The unemployment number has been rising since the last quarter of 2017 due to weak economic growth, the uncertainty surrounding policy and weak business sentiment.

NKC African Economics told Reuters, “the official South African unemployment rate probably will remain close to 27 percent in Q3, due to weak growth, continued policy uncertainty and a lack of measures to boost employment.”

The economy slips into recession in the second quarter of the year, contracted by 0.7 percent after first-quarter growth was downwardly revised to 2.6 percent decline.

“There is no way to sugar coat the numbers, the growth picture in the first half of 2018 is ugly and it shows in this economy that there is broad-based weakness across the primary and tertiary sectors of the economy,” said senior economist at BNP Paribas Jeffrey Schultz.

In October, South Africa halved its growth projection for 2018 to 0.7 percent from 1.4 percent, citing wider budget deficits for the 2018/2019 fiscal year. That was after World Bank lowered South Africa’s growth forecast due to weak revenue generation.

Still, tax revenue is expected to underperform in the next three years.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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