- Unemployment declines to 26.6% in second quarter from 26.7%
- Economy will probably grow zero percent, central bank says
South Africa’s jobless rate fell in the three months through June as more people gave up looking for work and the nation’s Independent Electoral Commission reduced staff.
The unemployment rate decreased to 26.6 percent in the second quarter from 26.7 percent in the previous three months, Statistics South Africa said in a report released on Thursday in the capital, Pretoria. The number of people without jobs fell by 90,000 to 5.6 million and the employed decreased by 129,000 to 15.5 million. The number of discouraged work-seekers rose by 92,000 to 2.5 million, according to the statistics office.
Gross domestic product in Africa’s second-largest economy contracted an annualized 1.2 percent in the three months through March and will probably not grow at all this year, according to the central bank, as the worst drought in more than a century, low commodity prices and weak demand in its main export markets weigh on output. The nation has struggled to boost employment since 2009 and has the highest jobless rate of more than 60 countries tracked by Bloomberg.
“The economy is just not growing fast enough to create enough jobs to lower the unemployment rate,” Kevin Lings, chief economist at Stanlib Asset Management Ltd. in Johannesburg, said by phone. “At this moment we just don’t have enough fixed-investment activity, enough expansion and capacity-building going on in South Africa.”
Manufacturing added 67,000 jobs in the quarter and employment in construction rose by 25,000, the statistics office said. The number of people working in agriculture dropped by 44,000 and community and social services, which includes the government, employed 127,000 less people than in the first three months of the year.
“In March, when we were registering voters, so many people would have come in temporarily for the work in the IEC and then that would have shown a decline in the second quarter of the year,” Kefilwe Masiteng, deputy director general for population and social services, told reporters in Pretoria. “We have also seen declines in the departments or areas of health and social development.”
South Africa will hold local-government elections to determine who controls the nation’s 278 municipalities on Aug. 3.
Economic growth in South Africa is too slow to improve living standards, the International Monetary Fund said this month. The nation needs annual expansion of 7.2 percent from 2018 to achieve the government’s goal of reducing the jobless rate to 6 percent by 2030, the World Bank said in February.
The rand strengthened 0.2 percent to 14.2358 per dollar as of 1:11 p.m. in Johannesburg on Thursday. Yields on rand-denominated government bonds due December 2016 were little changed at 8.74 percent.