South Africa’s unemployment rate has reached the highest in 14 years after a rate of 27.7 per cent in labour force was reported, a sign of a looming recession.
The unemployment has been fueled by the job shedding in agriculture and informal sector. Unemployment including those that have stopped looking for work is 9.3 million people out of work in a 22.4 million work force.
Statistics South Africa warned that recent credit downgrades to sub-investment grade and the threat of further cuts were taking its toll on the economy as the currency depreciated and made imports more expensive.
“Certainly you are better off without a downgrade than you are with one,” said Statistician General Pali Lehohla. “The depreciation of the currency works for you when it is deliberate.”
South Africa lost its coveted investment grade status in April when S&P Global Ratings and Fitch downgraded the country following the sudden firing of the finance in a midnight cabinet purge by President Jacob Zuma.