South Africa’s unemployment rate fell last quarter to 24.7 percent as the retail trade and finance industries added jobs in the continent’s largest economy.
The jobless rate decreased from 25.6 percent in the previous three months, Statistics South Africa said in a report released in Pretoria today. The number of people without jobs fell by 114,000 to 4.6 million. The median estimate in a Bloomberg survey of five economists was for the unemployment rate to stay unchanged at 25.6 percent.
South Africa needs yearly economic expansion of 5.4 percent to reach a target of cutting unemployment to 14 percent by 2020 and to 6 percent by 2030, according to the government’s National Development Plan. Growth will probably slow to 2.1 percent this year, the National Treasury said last week. South Africa has the third-highest jobless rate among 60 countries monitored by Bloomberg.
“The prospects for meaningful job creation are limited,” Kamilla Kaplan, an economist at Investec Ltd in Johannesburg, said in a e-mailed note to clients before the data was released. “The scope for job creation in the public sector is also restricted amid efforts to curtail the expansion of the wage bill.”
The government will keep staff numbers constant for the next three years to help limit state wages, Finance Minister Pravin Gordhan in his mid-term budget statement on Oct. 23. Gordhan introduced a bill in Parliament a day later to subsidize wages for new entrants to the labor market.
“Employment levels at 14 million in the third quarter are now similar to the pre-recession levels in the fourth quarter of 2008,” Peter Buwembo, executive manager for labor statistics at Statistics South Africa, told reporters in Pretoria.
While inflation decelerated to 6 percent in September, it remains at the top of the Reserve Bank’s 3 percent to 6 percent target range, limiting options for policymakers to cut the benchmark interest rate to boost growth and job creation.
The unemployment rate is compiled from a household survey covering the formal and informal industries.
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