South Africa’s unemployment rate dropped to the lowest level in more than five years in the fourth quarter, as the community and social services and construction sectors added workers.
The jobless rate declined to 31.4% in the three months through December, from 31.9% in the prior quarter, according to data released by Statistics South Africa in Pretoria on Tuesday.
That was the lowest reading since the third quarter of 2020. The median estimate of three economists in a Bloomberg survey was 31.7%.
The dip signals improved economic growth, Investec economist Lara Hodes wrote in a client note.
“A more resilient global economy – than previously anticipated – amidst heightened trade tensions, coupled with progress towards easing structural impediments domestically has seen South Africa’s growth prospects improve.”
Gross domestic product growth for 2026 is expected at 1.5%, accelerating toward 3.5% by 2030, Hodes said.
The stronger jobs data provides a boost to an economy burdened by one of the world’s highest unemployment rates, which has remained above 30% since the height of the coronavirus pandemic in 2020.
When combined with those who are available for work but not looking for employment, the rate stands at 42.1%.
Last week, President Cyril Ramaphosa in his State of the Nation address said all government actions are now “driven by the need for rapid and inclusive economic growth to create more and better-quality jobs”, including through investment in infrastructure and the digital and green economy.
Finance Minister Enoch Godongwana is expected to announce more details when he delivers the annual budget on 25 February.
BLOOMBERG