CAPE TOWN: South Africa’s unemployment hit its highest level on record in the first quarter, official data showed on Monday, clouding the country’s efforts to convince the major ratings agencies not to downgrade its credit. Moody’s late on Friday left its rating unchanged, giving the rand currency a lift on Monday morning in reaction. Finance Minister Pravin Gordhan said he aimed to show the other big ratings agencies that the country was on the right economic track ahead of their own reviews in the coming weeks.
But the statistics agency dealt Gordhan’s hopes a blow later on Monday when it said unemployment had risen to 26.7 percent in the first quarter – the highest level since the labour force survey began in 2008. The rand dropped sharply on the news and was down more than 2 percent against the dollar late in the afternoon.
South Africa, one of the world’s biggest metals producers, has been hit by a slide in commodities prices which has come on top of widespread labour unrest in the mining industry. President Jacob Zuma said the economy should be able to “weather the storm” as he unveiled initiatives aimed at accelerating growth including a private and public sector fund for small businesses after meeting business and labour leaders on Monday evening.
