Increase in food & fuel prices likely to worsen unemployment, warns economist
Efficient Group economist Dawie Roodt warns the expected increase in fuel and food prices over the next few months will in all likelihood lead to more job losses.
Roodt has been commenting on the latest jobless rate, which fell to 34.5%, from 35.3% in the final three months of 2021.
Statistician-general Risenga Maluleke released the report on Tuesday.
Roodt says while the slight drop in the unemployment rate was due to the economy stabilising after the Covid-19 lockdown, the worst is yet to come.
“The numbers that we are now seeing are more permanent and are probably going to remain fixed around the same level and less volatile over the next quarters. But this is not actually good news because the numbers seem to be stabilising on a bad level. I am quite concerned about this because over the next couple of months we are going to see a substantial increase in the cost of fuel and food prices.
“What we are facing on levels of unemployment is a little bit better than the previous quarter, but high and rising level of poverty in an environment where the cost of living is going high quite sharply,” says Roodt.
Roodt says government should also be concerned about the middle class leaving the country due to economic reasons.
“What we are currently seeing is that the middle class in South Africa, that very important section of society, is suffering. They are the people paying much of the taxes, they are carrying much of the burden to get the economy growing, and they are the people leaving South Africa because of various reasons.
“We need to keep the middle class in South Africa because they are the productive people, they are the taxpayers, unfortunately, because of the environment, we have many of them are leaving South Africa. And whenever one of those middle class individuals are leaving South Africa, we are losing a source of revenue for the state.”
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