Finance Minister Tito Mboweni. Picture: Nokuthula Mbatha/African News Agency(ANA). Finance Minister Tito Mboweni. Picture: Nokuthula Mbatha/African News Agency(ANA).
JOHANNESBURG - Government hopes that the proposed reforms contained in an economic policy paper released for public comment yesterday will help create one million jobs due to faster economic growth.
The National Treasury said it estimated stronger growth in gross domestic product (GDP) and job over the medium term period, when most of the far reaching interventions outlined in the policy paper take effect.
“We estimate that the policy interventions could raise average GDP growth by 2.3 percentage points over ten years and create just over one million jobs compared with a scenario without the policy interventions,” National Treasury said.
“However, these outcomes could potentially be much higher if the other structural reforms not modelled here, such as addressing the skills constraints through immigration policy, are taken into account.”
South Africa’s unemployment rate surged to 29 percent in the second quarter of the year, the highest unemployment rate in 11 years as the economy continued to shed jobs across the board.
South Africa’s economy has not grown above 2 percent since 2013 and is currently in its longest downward cycle since 1945 according to Reserve Bank governor Lesetja Kganyago.
The central bank in July slashed this year’s growth forecast to a pedestrian 0.6 percent, down from 1.7 percent the central bank had forecast in January after the economy plunged 3.2 percent in the first quarter.