'Wake up before it's too late,' unions warn govt after GDP falls
Congress of South African Trade Unions (Cosatu) Sizwe Pamla says this is a result of no drastic action being taken by the government to kick start the economy.
JOHANNESBURG – With the country’s gross domestic product (GDP) nose-diving, unions say government needs to wake up before it’s too late.
Stats SA has announced that South Africa's economy shrunk by 3.2% in the first three months, the biggest such drop in 10 years.
Load shedding, weak economic policy and instability at state-owned enterprises has been blamed by economists.
South African Federation of Trade Unions (Saftu) leader Zwelinzima Vavi said a contraction of seven sectors out of nine as announced by Stats SA means more job losses and an employment rate that would likely almost double.
“The government must go back to the drawing board. In our view, if they need to listen to more voices than those who own the means of production.”
Meanwhile, Congress of South African Trade Unions (Cosatu) Sizwe Pamla said this was the result of no drastic action being taken by the government to kickstart the economy.
“If you look at it, the government is continuing to adopt a regressive and transactional policy that only focuses on cutting social expenditure and weakening the capacity of the state.
“We’ve said that for this economy to grow, you can’t weaken the capacity of the state.”
Both Saftu and Cosatu agreed that national Treasury's neo-liberal policies have done nothing for the economy and instead have caused the shrinkage.
MINING RECORDS MORE LOSSES
Mining failed to lift itself out of recession, registering its third consecutive quarter of negative growth. This is mining’s biggest decline since the first quarter of 2016.
Weaker wholesale, retail and motor sales dragged the trade industry down by 3,6%. South Africa’s trade industry is now in recession, this being its second consecutive quarter of negative growth.
At the same time, agriculture production slumped by 13,2% after registering a 7,9% rise in activity in the fourth quarter of 2018. A slowdown in the production of field crops and horticultural products weakened performance in the first quarter.
Construction entered its third consecutive quarter of negative growth, slipping by 2,2%. Decreases were reported for activities related to residential and non-residential buildings, as well as construction works.
On the employment front, the construction industry shed 142 000 jobs in the first quarter compared with the fourth quarter of 2018, contributing over half of the 237,000 jobs lost across the entire economy.
Key facts from the GDP release for the first quarter of 2019:
Real GDP in the first quarter was down 3,2% quarter-on-quarter (seasonally adjusted and annualised).
Unadjusted real GDP in the first quarter was flat (0% growth) year-on-year.
Nominal GDP in the first quarter of 2019 was estimated at R1,20 trillion, lower than the R1,26 trillion recorded in the fourth quarter of 2018.
Expenditure on GDP in the first quarter fell by 3,4% quarter-on-quarter (seasonally adjusted and annualised), largely a result of declining exports, weaker fixed capital investment and falling household consumption expenditure.
(Edited by Leeto M Khoza)