President of South Africa, Jacob Zuma
hehehehe........South
Africa has been hit with high unemployment rate as the analysts have
insisted that the country might soon enter recession.
South Africa’s economy may be headed towards technical recession as
growth rate has shrunk and unemployment has hit levels not seen in 14
years.
According to a report by Reuters, the economy shrank 0.3 percent
in the last quarter of 2016 and if it shows a contraction when domestic
product results are released next week Tuesday, Africa’s most
industrialised economy will be in technical recession.
Reports said unemployment rose to its highest in 14 years in the
first quarter as agriculture and informal sectors shed jobs and more
people stopped looking for work.
The data are pointers the economy may be headed for recession.
The unemployment rate climbed to 27.7 percent of the labour force
in the first quarter, the highest since September 2003, from 26.5
percent in the last quarter of 2016.
The expanded definition of unemployment, which includes people who
have stopped looking for work, rose to 36.4 percent, or 9.3 million
people out of a total workforce of 22.4 million.
Statistics South Africa warned that recent credit downgrades to
sub-investment grade and the threat of further cuts were taking its toll
on the economy as the currency depreciated and made imports more
expensive.
“Certainly you are better off without a downgrade than you are with one,” said Statistician General Pali Lehohla. “The depreciation of the currency works for you when it is deliberate.”
South Africa lost its coveted investment grade status in April when
S&P Global Ratings and Fitch downgraded the country following the
sudden firing of the finance in a midnight cabinet purge by President
Jacob Zuma.
The rand lost about 10 percent in the wake of the cabinet shake up
and subsequent downgrades, making it one of the worst performing
emerging market currencies this year.
The two ratings firms, which cited political and economic
instability as reasons for the downgrades, are due to announce follow-up
ratings decisions this week.
The statistics department said half a million jobs were lost in the
quarter, with agriculture sector shedding 44,000 jobs and 14,000 lost
in the informal sector.
-NAN
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