SAFTU is relieved that the South African economy dodged a recession
3 September 2019
The South African Federation of Trade Unions (SAFTU) is relieved that the South African economy dodged a recession but warns that the economy is far from being out of the woods.
We have learnt with relief that after the devastating first-quarter decline by a massive 3.2% of the GDP in the first quarter of 2019 the economy staged a fightback and grew by a 3.1% in the second quarter of 2019.
1. Mining surprisingly led the growth by 14.4% which was a strong performance judged against the fact that the last time the sector grew by 16.3% was in 2016
2. The finance sector Finance: real estate and business services – the largest industry in the South African economy – grew by 4,1%. This was on the back of stronger performances by the banking and insurance sectors.
3. Trade also increased by 3.9% at the back of increases in the wholesale, retail and motor trade sales
4. Government also saw its most significant growth since the second quarter of 2014 even though temporal employment linked to elections drove this.
5. Electricity, gas and water also increased.
SAFTU wishes to warn that in the past, saw growth as high as 5% but accompanied by jobless growth. The second quarter relief of 3.1% growth seat side by side with a massive 573 thousand job losses in the second quarter in addition to the 200 000 jobs lost in the first quarter of 2019. Unemployment has reached 38% in the second quarter. Youth unemployment has now reached 56.4% in the second quarter, and 47% of African/Black women are unemployed.
SAFTU believes that the situation will remain as it is until the government and the employers implement the set of proposals SAFTU has put on the table. SAFTU has placed a series of demands including a real stimulus package, a new expanded fiscal and monetary policy, industrialisation, preparing for the fourth industrial revolution and taking practical steps to move our economy away from fossils while addressing workers concerns about job losses and just transition, etc.
The only way to change this situation is when we will take practical steps to move our economy into a new growth path and change the structure of the economy from being a mineral, finance and heavy chemicals dominated into an economy that will be based on industrialisation through beneficiation of our minerals to create value chains within South Africa.
We shall fight for these demands and preparations are under way to ensure that workers are mobilised behind them.
Issued on behalf of SAFTU, 3 September 2019
