TUESDAY, 7.00PM:
THIRD-quarter gross domestic product figures published on Tuesday by the Central Statistical Service show that despite wild swings from quarter to quarter, the real GDP for the first nine months of the year nonetheless increased by 1,8% compared to the same period the previous year.
Annualised quarterly growth rates have fluctuated widely this year, from a negative 0,7% in the first quarter, to positive growth of 2,4% and 0,3% in the second and third quarters respectively.
The CSS says that according to the latest economic indicators the low economic growth rate of 0,3% in the third quarter was the result of a widespread downswing in the real output of most economic sectors.
Asghar Adelzadeh, research director at the National Institute for Economic Policy, said the latest GDP figures mean there is slow economic growth, and thus little job creation. He added this is unacceptable for an economy with such a high unemployment rate.
Adelzadeh questioned the government’s macroeconomic approach. Initially analysts predicted GDP growth for 1997 of 2,9% in real terms, or 52 000 new jobs. This is not taking place, he said. Instead, there has been a decline in employment. ”It raised the question of at what point we seriously need to reconsider the assumptions underlying Gear [government’s growth, employment and redistribution strategy],” said Adelzadeh.
This means a re-look at fiscal policy, the tight monetary policy, and rapid liberalisation of the economy. He feels there is too much emphasis on an export orientation, as this leads to more capitalisation of production, and a reduction in labour-intensive, employment-creating activities. In addition, government has cut its investment budget and capital expenditure in favour of reducing the deficit. Adelzadeh feels this is inappropriate as it hampers job creation.
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