BUSINESS NEWS - South Africa’s economy could see better days ahead, despite the unemployment rate and the Eskom electricity tariff increase, an economist said.
According to Statistics SA figures released on Tuesday, 14 May, the unemployment rate has increased by 0.5% to 27.6% in the first quarter of 2019, as compared to the fourth quarter (Q4) of 2018.
The working age increased by 149 000 while the labour force decreased by 176 000.
Sectors that saw a drop were the formal and informal, agriculture and private households as compared to the Q4 2018.
Despite the continued increase of joblessness, this would not reflect on the prospects of a growing economy, professor Bonke Dumisa told The Citizen.
“The rate at which jobs are created and the economic growth rate are not correlated,” said Dumisa. “We need to observe all other sectors that are dealt with when calculating our economic growth rate.
“But we are not hoping to see the economic growth rate going far beyond 1% this year. It would be luck if it went beyond 1.5% next year as our population growth rate is close to 2%; we have to manage the two.
“We can see some signs that the economy is going to pick up.”
As unemployment was on the rise, Eskom has irked municipalities and businesses by increasing electricity tariffs.
Municipalities across the country now face a 15.63% tariff increase. This is despite the National Energy Regulator of SA initially granting the utility a hike of 9.41%, 8.1% and 5.2% for the next financial years.
While Dumisa hoped the government would sort out Eskom as envisioned in the budget speech, energy expert Ted Blom believed the utility was only charging citizens for corruption to continue at the state entity.