Drop in unemployment sign of economy 'stabilising' - economist
An economist says the small improvement in the country's unemployment numbers is a sign of the economy gradually stabilising.
Efficient Group economist Dawie Roodt was reacting to Tuesday's announcement by Stats SA that the South African unemployment rate decreased to 34.5 % for the first quarter of 2022.
"During the past two years or more economic data was quite volatile because of the lockdown and what we are now seeing is the economic data sort of stabilising at a certain level," Roodt says.
"In the case of the unemployment level, what is certainly happening is unemployment is stabilising at very high levels, which means that certainly that people are at high levels of unemployment, but that poverty is going up and we know that from poverty data as well."
READ: Unemployment rate drops slightly in first quarter
However, he warns the rising fuel prices and the rising cost of living will create a challenging environment for the country in the coming months.
"I am afraid that with the current levels of unemployment coupled with the expected significant increases in food prices, I expect further significant increases in food, electricity and energy prices generally, which will mean that inflation in South Africa is likely to keep on creeping higher which will force the Reserve Bank to increase interest rates which will have a negative impact on the economy."
