Province’s economy predicted to grow by 3.9%

THE WESTERN Cape’s economy is forecast to grow at 3.9 percent between this year and 2017, higher than the national average, even though unemployment has increased, Finance, Economic Development and Tourism MEC Alan Winde says.

Winde presented the 2012 Provincial Economic Review and Outlook in the legislature last week. It will form the backbone of how the budget will be allocated for the next financial year.

The presentation came on the same day that Moody’s Investors Service unexpectedly downgraded SA’s sovereign credit rating, saying its decision reflected the national government’s “diminished capacity” to handle its political and economic challenges and a more negative investment climate in the wake of strikes in the mining sector and “policy uncertainty” ahead of the ANC’s Mangaung elective conference in December.

The province’s Economic Review and Outlook explores four different areas – an overview of economic performance, the development of Western Cape economic sectors, labour market dynamics and the socio-economic situation in the province.

Winde said the services sector is projected to lead growth with annual growth of 4.1 percent and employment growth at 2.1 percent.

“Exciting opportunities are opening up in the oil and gas sector and the growth achievements and initiatives in the business process outsourcing and information and communications technology are commendable.

“Furthermore, the positive outlook for the tourism industry remains encouraging,” he said.

Winde said the export of goods from this province had grown from R25.1 billion in 2001 to R54.7bn in 2011 mostly to the EU and southern African countries.

The labour force participation is up with seven out of 10 working age adults working compared to five out of 10 nationally, but unemployment has increased by more than 150 000 to 546 000 of a total population of 5.29 million.

Of the employed in the Western Cape, 50.9 percent earned between R1 001 and R4 000 a month, 33.5 percent earned above R4 000 while 15.6 percent earned no more than R1 000. In 2012 half of the employed were coloured, 28.6 percent black and 20.2 percent white.

Of the unemployed, coloureds account for 49.6 percent (271 000), blacks 46.3 percent (253 000) and whites 4 percent (22 000).