Commerzbank’s Volkmar Baur highlights that South Africa’s unemployment has fallen to 31.4%, the lowest since the pandemic, but remains structurally very high. Employment growth lags population gains, and the labour force has shrunk as more people stop job hunting. He argues reforms are helping but need faster implementation, which would also benefit the Rand.

Labour market fragility and rand implications

"The unemployment rate in South Africa fell to 31.4% in the last quarter of last year, its lowest level since the end of the pandemic."

"Although the number of people in employment rose to 17.1 million, the increase of 0.1% compared with the previous year was significantly smaller than the 1.2% increase in the working-age population (15-64)."

"There are some small positive developments: the proportion of formal employment rose, the proportion of full-time employees increased, and youth unemployment (15-24 year olds) also fell, albeit from 58.5% to 57.0%."

"It is therefore clear that the economy is still growing too slowly to create a significant number of new jobs and reduce unemployment across the board."

"The structural reforms of the South African government are having an effect. The economic situation is improving."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)