North-West University: South Africa needs to maximise job creation at any given growth rate

“The slightly better news on the unemployment front is a welcome trend, as it comes after a prolonged period of persistent deterioration in South African employment levels in recent times.”

In commenting on the latest unemployment figures for the first quarter of 2022, Prof Raymond Parsons, economist from the Business School of the North-West University (NWU), says to a large extent this development follows South Africa’s strong economic recovery in 2021 from the pandemic lockdowns, and should be viewed in the light 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.”

He says the risk now is that these factors may yet put a spoke in the wheel of jobs recovery. “Nonetheless, on the basis of certain favourable assumptions there is the hope that unemployment in the country may well have stabilised at an elevated level now.”

“South Africa’s unemployment rate is nevertheless still among the highest in the world. The massive youth unemployment rate in South Africa also remains a big challenge and highlights the scale of the job-creating measures that are needed to remedy the situation.”

Prof Parsons points out that the latest unemployment figures again confirm that South Africa needs gross domestic product (GDP) growth rates of 3% to 4% to make a serious dent in the levels of unemployment.

“If the present economic trends continue, GDP growth in 2022 is now likely to be about 1,6%. South Africa therefore needs to break out of its low growth trap by collectively expediting the urgent implementation of key economic reforms. South Africa still needs to maximise the number of jobs created at any given growth rate.”

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