Johannesburg - Labour federations have reacted with caution to news that South Africa's economy has slipped out of recession in the second quarter of 2017.
Both Cosatu and Fedusa have welcomed the change in growth numbers, but said the 2.5% growth in gross domestic product still falls short of the target set out in the National Development Plan (NDP), which is necessary to create much needed jobs.
Stats SA announced on Tuesday that the country's gross domestic product (GDP) had risen by 2.5% in the second quarter of 2017 compared to the dismal 0.7% growth during the first quarter of the year.
Statistician general Pali Lehohla said this surprise growth was the result of improvements in couple of sectors such as agriculture, forestry and the fishing industry.
Fedusa's general secretary Dennis George said the growth was still too low to meet the needed targets of creating 11 million jobs as set out in the NDP.
The NDP irons out targets for the government that need to be achieved within calculated deadlines.
“The 2.5% growth is encouraging and will assist us to come out of recession. However this level of growth is still below the 5.4% target that has been set down by the NDP for the period 2011-2030 in order to create 11 million much needed jobs for our young people,” said George.
Cosatu cited the gloomy unemployment numbers as a "crisis" that could not be dealt with unless the growth targets stated in the NDP are achieved.
"This is a crisis considering that the NDP projected that the economy will create 11 million jobs by 2030. In order to achieve this, the economy would have to grow by 5.4% per annum, with unemployment of 6% per annum in 2030," said Cosatu spokesperson Sizwe Pamla on Tuesday.
The federation also cited private sector "investment strike" as a cause for the slow growth.
"The growth in jobs will not happen as long as the private sector is continuing with their investment strike, with more than R800 billion of their cash reserves sitting in bank accounts instead of being invested back into the economy," he said.