We are in danger of being trapped in a virtual zero growth, zero jobs glide path in SA

8 June 2016

Statistics South Africa released shocking economic data today revealing that gross domestic product contracted by 1.2% in the first quarter of 2016. The main contributor to the slowdown in economic growth was an 18.1% decline in the mining and quarrying sector, reflecting lower production in platinum and iron ore.

The data suggests, that with two sectors, agriculture and transport already in recession, and business confidence at all time lows, the economy is in danger of becoming trapped on a zero growth, zero jobs glide path, putting more jobs at risk in South Africa.

Despite the fact that Fitch Ratings affirmed our BBB- sovereign investment grade rating, with a stable outlook, they focused attention on the fact that “political tensions” increase the probability of “policy missteps”, which risk derailing the implementation of much needed economic growth enhancing measures in South Africa.

We cannot go on like this, and with 8.9 million people currently unemployed, it is now imperative that government work together with the Minister of Finance, Pravin Gordhan, to end policy uncertainty, to implement structural reform necessary to boost economic growth and create jobs, and to turnaround failing state-owned enterprises, such as South Africa Airways.

Issued by David Maynier, DA Shadow Minister of Finance, 8 June 2016