Recession to cost SA more jobs - expert

04 March 2020 - 10:19
By Mpho Sibanyoni
Repeated bail-outs of state-owned firms such as SAA's  haven't helped the economy much.
Image: Waldo Swiegers/Getty Images Repeated bail-outs of state-owned firms such as SAA's haven't helped the economy much.

A leading economist has warned that SA's slip into technical recession could have huge impact on jobs security.

Yesterday, Statistics SA said the country's economic growth for all of 2019 stood at 0.2%, its lowest reading since the global financial crisis in 2009.

The results meant that the country slipped into technical recession by recording two consecutive negative growth.

According to Wits University economics lecturer Lumkile Mondi the economic downturn was caused by the construction and manufacturing sectors.

Mondi said these are industries where an individual worker is responsible for feeding between five to 20 family members.

"Should the country continue experiencing economic downturns, these workers are likely to lose their jobs and their families will suffer," said Mondi.

He added that economic downturns could also dampen investor confidence, making it difficult for government to carry out its functions to an extent that social wages and health services might be cut.

The weak economic performance piles pressure on President Cyril Ramaphosa's administration which has been struggling to keep his election pledge to revive economic activity.

Instead, South Africa remains dogged by high and rising debt, low growth and soaring unemployment.

Weak agriculture output and transport were the main drags on growth in the last quarter, StatsSA said, followed by construction, mining and manufacturing, which outweighed positive contributions from finance and government spending.

Seven of the nation's 10 economic sectors contracted in the fourth quarter, StatsSA said.

The government has repeatedly bailed out Eskom and other state-owned enterprises including the national carrier, South African Airways. - with AFP