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Johannesburg - March state expenditure in the Eastern Cape rose an enormous 60.5% year-on-year (y/y), boosting the province’s growth index for the month by 19% y/y, the highest growth registered to date for the Eastern Cape barometer.
Economists.co.za economist Mike Schüssler, the compiler of the BoE Private Clients and Sake24 Eastern Cape Barometer, said the province’s economy was doing incredibly well, but was at risk of overheating.
He said Eastern Cape economic growth was well spread across the different sectors and not too dependent on government expenditure.
Its growth would, for instance, slow down to 5.1% y/y if the government component were excluded. But it would still be healthy growth.
According to Schüssler, this growth was largely attributable to officials spending the last available money in the budget before the end of the fiscal year.
Government expenditure comprises, for instance, public servants' salaries, as well as purchases of medicines, books, food and other social expenditure like income grants.
But the growth in state expenditure is not sustainable and the Eastern Cape’s strong economic revival is not creating sufficient jobs, Schüssler said.
The economic recovery is good, but it benefits only those with jobs and money.
Statistics South Africa's Labour Force Survey, which was published last week, shows that in the first quarter the Eastern Cape had a 41% unofficial unemployment rate. This figure includes discouraged jobless people no longer seeking work.
Despite this exceptionally high figure, first-quarter unemployment in the Eastern Cape was down y/y and the number of unemployed declined 36 000 y/y to 919 000.
- Sake24
For business news in Afrikaans, go to Sake24.com.
For more news on the Sake24/BoE Private Clients barometers, go to www.fin24.com/barometer.
Economists.co.za economist Mike Schüssler, the compiler of the BoE Private Clients and Sake24 Eastern Cape Barometer, said the province’s economy was doing incredibly well, but was at risk of overheating.
He said Eastern Cape economic growth was well spread across the different sectors and not too dependent on government expenditure.
Its growth would, for instance, slow down to 5.1% y/y if the government component were excluded. But it would still be healthy growth.
According to Schüssler, this growth was largely attributable to officials spending the last available money in the budget before the end of the fiscal year.
Government expenditure comprises, for instance, public servants' salaries, as well as purchases of medicines, books, food and other social expenditure like income grants.
But the growth in state expenditure is not sustainable and the Eastern Cape’s strong economic revival is not creating sufficient jobs, Schüssler said.
The economic recovery is good, but it benefits only those with jobs and money.
Statistics South Africa's Labour Force Survey, which was published last week, shows that in the first quarter the Eastern Cape had a 41% unofficial unemployment rate. This figure includes discouraged jobless people no longer seeking work.
Despite this exceptionally high figure, first-quarter unemployment in the Eastern Cape was down y/y and the number of unemployed declined 36 000 y/y to 919 000.
- Sake24
For business news in Afrikaans, go to Sake24.com.
For more news on the Sake24/BoE Private Clients barometers, go to www.fin24.com/barometer.
