If you are looking for a job in South Africa you already know you are not alone – and by the end of next year a million more of your fellow country-people will be joining you.
That’s the shocking reality if a new study is only partly accurate. The report by the University of South Africa (UNISA) and insurance giant Momentum says at least a million more people could be unemployed by the end of 2018 – and both institutions say this is a “conservative estimate”.
BusinessTech.co.za quotes the study which was released during the launch of the latest Household Financial Wellness Index. Both groups noted that if the economic performance of the 2011 to 2016 period were extrapolated up to 2018, a fairly gloomy picture emerges with respect to 2017 and 2018.
The study highlighted that GDP growth rates declined from 3.3% in 2012 to 0.3% in 2016 and are expected to be below 1% in 2017 and 2018, and that during the past year economists have been downgrading their economic growth expectations for 2017 and 2018 continuously.
It also noted that the production elasticity of employment – which indicates the elasticity between employment growth and GDP growth – declined from 0.7 in 2011 to -0.2 in 2015 and is expected to be below 0.3 in 2017 and 2018.
“The impact of the increasing economic stagnation on household finances is clear from the results of the Momentum/Unisa Household Financial Wellness Index results for the period 2011 to 2016,” the report says.
“During this period Financial Wellness index rates increased marginally, namely from 64.1 in 2011 to 67.3 in 2016, constituting about 5% growth over this period… Also, during this period real GDP grew by about 10% giving rise to a low production elasticity of Financial Wellness ratio.”
“Given that GDP growth is expected to stagnate over the period 2017 to 2018, it is being expected that financial wellness levels will also stagnate over this period showing lower growth rates than the low expected GDP growth rates.”