(Updates with economist comment in third paragraph.)
June 21 (Bloomberg) -- South Africa, which has the highest unemployment rate of 61 countries tracked by Bloomberg, added 47,000 non-farm jobs in the first quarter, as growth in Africa’s largest economy gathered pace.
Employment in formal, non-agricultural industries increased 0.6 percent to 8.298 million from the final three months of last year, when it expanded 1.2 percent, the Pretoria-based Statistics South Africa said on its website today. The data was based on a survey of companies that are registered to pay tax.
“The South African labor market is beginning to gain momentum,” Shireen Darmalingam, an economist at Standard Bank Group Ltd., Africa’s biggest lender, said in a note to clients. “This bodes well for economic growth in the coming quarters. We could start seeing the unemployment rate improve as the year unfolds.”
The economy grew at its fastest pace in a year in the first quarter, expanding 4.8 percent, spurred by the lowest interest rates in three decades. The National Treasury estimates a 7 percent annual growth rate is needed over the next decade to meet the government’s goal of creating 5 million jobs and slashing unemployment to 15 percent by 2020.
“The jobs goal is extremely ambitious and likely unrealistic,” Moody’s Investors Service said in a June 17 report. “Without faster and sustained growth, the general situation will deteriorate once again as employment will fail to keep pace with the growth in the labor force.”
South African companies cut their workforces after the global financial crisis hit, lifting the jobless rate to a peak of 25.3 percent in the third quarter of last year. The rate stood at 25 percent in the first quarter of 2011, when the number of people with jobs fell by 14,000 to 13.1 million according to a separate quarterly Labor Force Survey, released on May 5, which includes informal businesses.
“The economy continues to recover from the global economic recession, which made us lose over a million jobs,” President Jacob Zuma said in a June 14 address to lawmakers in Cape Town. “We are particularly pleased with the growth in formal employment, which provides better opportunities for most working people.”
Workers in formal employment on average earned an estimated 12,244 rand ($1,810) a month before tax and other deductions in the first quarter, 9.3 percent more than in the same period a year ago, the statistics agency said.
--Editors: Karl Maier, Ben Holland, Phil Sanders
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