/ 8 March 2013

South Africa’s economy struggles to get back into gear

South Africa's Economy Struggles To Get Back Into Gear

South Africa is struggling to return to the levels of economic activity it enjoyed before the 2008-2009 global economic recession.

Sluggishness in the economy is evidenced by a higher level of unemployment, which at the end of 2012 was 3% higher than in late 2008, even though the number of people able to work grew by 1.5%.

Manufacturing, electricity and mining outputs are all lower than their pre-2009 peak level. Mining output has seen the sharpest decline, with an 18% drop.

The Organisation for Economic Co-operation and Development believes that a combination of weak competition in product markets and dysfunctional labour ­markets is holding back growth and aggravating unemployment.

The good news is that finances have been kept under control. In 2009, core inflation was far above the Reserve Bank's target of 6%, but has been well under since 2010.