State wage bill boosts economy, but troubles analysts

State wage increases continue to exceed inflation. (Lisa Skinner, M&G)

State wage increases continue to exceed inflation. (Lisa Skinner, M&G)

Figures released by Statistics South Africa this week showed third-quarter gross domestic product growth easing to 1.2%. Government services is the second-largest sector after the finance, real estate and business services sector.

Although mining and quarrying contracted by 12.7% in the third quarter and growth slowed in industries such as agriculture and manufacturing, general government services grew from 1.8% in the first quarter to 2.7% in the third quarter.

State wage increases continue to exceed inflation and have helped to address inequality, because 40% of the country's high-earning black workers are government employees.

However, analysts continue to warn of an unsustainable wage bill and foreign investors are observing this trend closely.

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn


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