Johannesburg - Business Unity SA (Busa) has lowered its growth
outlook for the country following the release of a World Bank report,
the organisation said on Wednesday.
"Busa has also recently revised its outlook for growth
to about 2.5%, compared with 2.7% a few months ago," the
body said.
"This weaker growth performance has been the outcome of
both deteriorating global economic conditions as well as domestic
constraints on growth. Growth in SA has lost momentum."
The World Bank report "Inequality of Opportunity in
SA found that the circumstances a child was born into of ethnicity,
location, gender, and family background, variably affected the child's
access to basic opportunities.
It found that in particular, location and ethnicity
were important factors determining inequality in employment
opportunities later in life.
Busa said it shared the concerns expressed by the World
Bank about the risks to social and political stability in South Africa
posed by high unemployment, huge income discrepancies and widespread
poverty.
"While high youth unemployment is not unique to South
Africa, it is clear again from the World Bank report that it is an
especially acute problem in this country," it said.
"It therefore remains urgent for all possible steps -
including a youth wage subsidy - to be taken to alleviate the phenomena
of youth unemployment."
It said the key to higher growth and more jobs was to raise total fixed investment in both the private and public sectors.
"If SA wants to eventually reach a 6% growth
rate, with all its benefits, then such a growth rate will need to be
supported by total fixed investment of about 25% of GDP (gross
domestic product) in the years ahead," Busa said.