DEMOCRATIC South Africa is about to navigate through its biggest jobs bloodbath in 17 years with the Treasury saying the effects of the global financial crisis will be worse than previously anticipated.
DEMOCRATIC South Africa is about to navigate through its biggest jobs bloodbath in 17 years with the Treasury saying the effects of the global financial crisis will be worse than previously anticipated.
Treasury director-general Lesetja Kganyago not only confirmed the country was in a recession but also told a media briefing at the Union Buildings in Pretoria yesterday that the financial storm that former finance minister Trevor Manuel warned South Africans about had arrived and is "more ferocious than the National Treasury predicted".
Treasury was responding to the GDP data for the first three months of 2009 by Statistics SA, which showed the country's GDP for the first quarter of 2009 decreased by 6,4percent compared to the fourth quarter of 2008.
Kganyago said though the government announced a stimulus of R787billion in infrastructure investment in February, the manufacturing sector would continue to shed jobs while industries that depend on exports could remain in the doldrums even when the economy started to recover in the last two quarters of the year.
"As a country we had taken decisions earlier that cushioned the South African economy from the global financial slowdown. But the storm is more ferocious than we initially thought."
Kganyago said not only was the economy not expected to create jobs, people who previously had jobs were already losing jobs and more will do so. This meant the situation in which between 200000 and 300000 jobs were recorded lost during this year's first quarter would also worsen.
"If you do not have a job, then there is nothing for you to save. So the impact of the recession is that it slows down the pace of job creation and it also suggests that there are people who previously had jobs but no longer have them now," said Kganyago.
STORM NOT OVER
DEMOCRATIC South Africa is about to navigate through its biggest jobs bloodbath in 17 years with the Treasury saying the effects of the global financial crisis will be worse than previously anticipated.
DEMOCRATIC South Africa is about to navigate through its biggest jobs bloodbath in 17 years with the Treasury saying the effects of the global financial crisis will be worse than previously anticipated.
Treasury director-general Lesetja Kganyago not only confirmed the country was in a recession but also told a media briefing at the Union Buildings in Pretoria yesterday that the financial storm that former finance minister Trevor Manuel warned South Africans about had arrived and is "more ferocious than the National Treasury predicted".
Treasury was responding to the GDP data for the first three months of 2009 by Statistics SA, which showed the country's GDP for the first quarter of 2009 decreased by 6,4percent compared to the fourth quarter of 2008.
Kganyago said though the government announced a stimulus of R787billion in infrastructure investment in February, the manufacturing sector would continue to shed jobs while industries that depend on exports could remain in the doldrums even when the economy started to recover in the last two quarters of the year.
"As a country we had taken decisions earlier that cushioned the South African economy from the global financial slowdown. But the storm is more ferocious than we initially thought."
Kganyago said not only was the economy not expected to create jobs, people who previously had jobs were already losing jobs and more will do so. This meant the situation in which between 200000 and 300000 jobs were recorded lost during this year's first quarter would also worsen.
"If you do not have a job, then there is nothing for you to save. So the impact of the recession is that it slows down the pace of job creation and it also suggests that there are people who previously had jobs but no longer have them now," said Kganyago.