CAPE TOWN: South Africa’s jobless remained at a 14-year high in the third quarter as the continent’s most-industrialized economy staged a weak recovery from a recession. The unemployment rate was 27.7 percent, matching the previous two quarters’ figures, Statistics South Africa said in a report released on Tuesday in Cape Town.
The economy expanded 2.5 percent in the three months ended June 30, exiting its second recession in almost a decade after agricultural output surged. Last week, the National Treasury almost halved its growth forecast for this year to 0.7 percent as business and consumer confidence dropped. It expects tax revenue to fall well short of projections made in February, and the lack of measures to mitigate against this shows the country is straying from its fiscal-consolidation path, Fitch Ratings Ltd. said. “The high unemployment is going to be a drag on economic growth’,” Thabi Leoka, an economist at Argon Asset Management, said by phone from Johannesburg. “Growth is expected to remain below 2 percent in the next three years, which tells me that unemployment is unlikely to improve if growth and productivity is struggling to improve.”
