South Africa's Q1’24 unemployment rate rises to 32.9%

South Africa is currently facing economic challenges as its unemployment rate rose to 32.9% in the first quarter of 2024, up from 32.1% in the previous quarter. The number of unemployed individuals increased to 8.2 million compared to 7.9 million in the last quarter of the previous year. Siobhan Redford, an Economist at RMB, discussed these concerning statistics on CNBC Africa. Redford highlighted several key points regarding the current economic conditions in South Africa. Firstly, she mentioned the structural constraints that the country is facing, such as ongoing power shortages and weak demand, leading to challenges in sectors like mining. These constraints, along with high global interest rates affecting demand, are contributing to the difficult economic environment in the country. Redford expressed some optimism about a potential positive push in the economy, especially with recent improvements in uninterrupted power supply, which could lead to increased manufacturing and job creation. However, she emphasized the need to address the underlying structural issues to support long-term growth and employment. Redford also discussed the varying performance of different sectors, noting declines in employment in utilities and construction, as well as some job cuts in the financial sector in the first quarter of the year. Although there are areas of hope, such as the potential recovery in the mining sector driven by demand for commodities, challenges remain in achieving sustainable growth. Despite the concerning unemployment numbers, Redford acknowledged the independence of institutions in generating accurate statistics, reflecting the integrity of South Africa's democratic system. Looking ahead, Redford indicated a cautious outlook on potential rate cuts by the central bank, citing the need to address structural constraints that may limit the impact of monetary policy. While adjustments to growth forecasts have been made, Redford remained optimistic about the economy's resilience and the potential for certain sectors to drive growth. The upcoming elections and subsequent government policies will play a crucial role in shaping South Africa's economic trajectory in the coming years, with a focus on addressing fundamental challenges to support sustainable growth and job creation.