Jobless youth a threat to growth - economist

Feb 11 2013 17:46
Cape Town - South Africa's potential for gross domestic product (GDP) growth could be stalled by several challenges, such as youth unemployment and labour strife, an economist warned.

“In South Africa, the potential for GDP growth could be negatively affected by the growing level of youth unemployment, lack of opportunities, social tensions and unrest in the labour market,” said Yves Zlotowski, Coface chief economist.

Zlotowski, who was speaking at a conference in Paris last week, warned that unrest could potentially spread into some key emerging markets.

This situation is being exacerbated where the middle class is voicing opposition to corruption and poor governance.

“A fully expanding middle class is more demanding in terms of law, anti-corruption measures, freedom and transparency. Political institutions in emerging countries are being challenged to adapt to this new situation.”

He pointed out that the slow pace of reform in emerging markets, infrastructure deficiencies and governments’ inability to respond to middle class expectations was problematic.

Despite these challenges, Coface sees significantly higher growth in certain emerging markets in 2013 compared to most established markets.

Zlotowski said that one of the factors contributing to growth in emerging markets is export trade openness.

Countries such as India, the Philippines, Indonesia, Thailand, Malaysia and Korea are touted to grow, while Russia, Turkey, Romania, Ukraine, Croatia and Hungary struggle to produce GDP growth above 4%.

Coface estimated China’s growth to rise to 8.5% in 2013, India’s growth to increase to 6.0%, a 5.2% growth for Sub-Saharan Africa, while Russia’s figures are estimated to fall to 3.0%.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

india  |  china  |  south africa  |  emerging markets



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about: MINI BUDGET

Finance Minister Malusi Gigaba has laid bare South Africa's economic woes. Visit our Mini Budget Special for all the action.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Free education in South Africa is:

Previous results · Suggest a vote