Unemployment surges in South Africa

South Africa’s jobless rate increased by more than expected with losses seen in a number of sectors including construction and community and social services, putting the labor market on a weaker footing even as the Iran war got underway.

The unemployment rate rose to 32.7% in the three months through March from 31.4% in the prior quarter, according to data released by Statistics South Africa in Pretoria on Tuesday. The median estimate of three economists in a Bloomberg survey was 31.7%.

The rise in the number of unemployed — now at 8.1 million — is a blow for South Africa’s fragile economy that is also confronting fresh challenges from the war, which prompted the International Monetary Fund last month to lower its 2026 forecast for the nation’s economic growth to 1% from 1.4% previously.

Fuel and fertilizer prices have soared since the US and Israel attacked Iran on Feb. 28, creating potentially serious headwinds for oil-importing nations like South Africa.

High unemployment in Africa’s most industrialized economy has also fanned frustration that’s spilled into anti-immigrant protests in parts of the country in recent weeks. 

The xenophobic sentiment has sharpened pressure on the government before local elections scheduled for Nov. 4, with some groups blaming foreign nationals for a lack of jobs and straining already fragile public services.

The bulk of the job losses were in construction and community and social services. Manufacturing and mining added workers.