South Africa's Macroeconomic Challenges Deepen
Today's Real GDP growth of 1.3% together with a material increase in the country's already high unemployment rate have worsened the macroeconomic outlook. The Minister of Finance was hoping for an annual rate of 2% for 2015, at this rate this budgeted figure is fading away fast. The Minister may have to tighten the fiscal tap even more. The unemployment rate meanwhile increased to 26.4%, from a level of 24,3% six months ago. From a political economy perspective this is bad news indeed. The 2nd term of President Zuma has entailed a succession of negative macroeconomic and structural developments. Propelled by a sever energy crisis, and a growing militancy on the part of fractured labour unions, the economy is suffering from daily disruptions in production, sagging investor confidence and increasingly even growing consumer pessimism as regards the outlook for growth and income stability.