SA’s unemployment rate could worsen, economist warns

Stats SA confirmed on Tuesday that in the first quarter of 2020, before the country went into national lockdown, the unemployment rate rose to 30.1%.

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JOHANNESBURG - With the grim picture painted by the recent unemployment statistics, South Africans will be looking to Finance Minister Tito Mboweni on Wednesday to give hope for the battered economy.

Stats SA confirmed on Tuesday that in the first quarter of 2020, before the country went into national lockdown, the unemployment rate rose to 30.1%.

The decline was seen largely in the financial, community, and social services sectors along with agriculture.

Stats SA said it came as no surprise that the unemployment rate had increased, but the drop in jobs for heavyweights like the agriculture sector were cause for concern.

Economists said that the figures would worsen in the next quarter due to the effects of COVID-19.

Chief economist at Stanlib Kevin Lings said that government’s relief funds, while welcome, would not necessarily cushion the blow of job losses.

“Even with significantly more money, there will still be businesses that go out of business and an increase in unemployment. The question is when we get past the peak of this virus, will we be able to reopen those businesses and get back people to work?” he said.

Lings said that he was waiting to hear what policies Mboweni would announce on Wednesday.

“I think we are looking to the minister to provide us with some sort of idea as to where policy is going over the coming months and how will government be able to lift the growth rate so that we can create more job opportunities,” he said.

He said while the minister could be sensitive to the current conditions, he could be limited by government’s balance sheet.

WOMEN MOST VULNERABLE

Meanwhile, Statistician-general Risenga Maluleke said that the first-quarter unemployment figures showed that young people and women remained extremely vulnerable in the local labour market.

Maluleka said the first-quarter figures showed women were worse off.

“Women are much more affected because in the expanded definition [of unemployment] they’re sitting at 43.4% higher than their male counterparts, who are sitting at 36.5%. It’s the same with the official definition [of unemployment] women are always vulnerable to the labour market. While women, in general, are vulnerable to the labour market, black African women, followed by coloured women, are much more vulnerable,” he said.

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