The National Youth Development Agency (NYDA) has called for a more coordinated and youth-focused economic response amid rising global uncertainty and domestic constraints.
The call comes after the latest decision by the South African Reserve Bank’s Monetary Policy Committee (MPC) to keep the repo rate unchanged at 6.75%, against a backdrop of heightened global uncertainty and emerging economic risks, with policymakers opting for caution amid volatile international conditions.
According to the MPC, the recent outbreak of conflict in the Middle East has triggered a significant global supply shock, leading to higher prices key commodities, including oil, gas, and fertilisers while dampening global growth prospects.
These developments are expected to push inflation upwards in the short term and limit economic activity.
While South Africa has recorded modest economic growth of 1.1% in 2025, the NYDA warns that this level of expansion remains insufficient to address the country’s deep-rooted structural challenges, especially the persistent high rate of youth unemployment.
The agency said the current growth trajectory is neither inclusive nor transformative, with many young people still excluded from meaningful participation in the economy.
“Inflation remains contained at around 3% but is expected to rise temporarily due to higher energy prices, with fuel inflation projected to increase sharply in the coming months.
“While this reflects external cost pressures, it will have direct consequences for young people, particularly through rising transport and food costs, which disproportionately affect low-income households,” the NYDA said.
The NYDA noted that while the decision to hold interest rates steady reflects a prudent and measured monetary policy stance, it also highlights the limitations of monetary tools in addressing broader structural challenges facing the South African economy.
“The combination of weak economic growth, rising costs, and limited employment prospects risks further deepening the socio-economic vulnerabilities of young people.”
From a developmental perspective, the current economic environment underscores the necessity for a more coordinated and growth-oriented policy response. The NYDA stressed that supply-side shocks, such as those stemming from global conflicts, cannot be resolved solely through interest rate adjustments.
Instead, the agency called for complementary fiscal, industrial and social policy interventions aimed at strengthening domestic resilience and expand productive capacity supporting inclusive growth.
Among its key recommendations, the NYDA is advocating for accelerated public investment, particularly in infrastructure and sectors with strong employment potential. It also called for targeted support for youth-owned enterprises to mitigate the impact of rising input and operating costs.
In addition, the agency highlighted the importance of strengthening of programmes that provide work experience, skills development, and pathways into the labour market, particularly for first-time job seekers.
The NYDA further stressed the need for stronger alignment between macroeconomic policy and youth development objectives, arguing that economic strategies must explicitly address the barriers facing young people.
South Africa’s youth unemployment crisis, the agency noted, is structural and requires deliberate policy action that goes beyond short-term stabilisation.
“Economic recovery must be measured not only by inflation outcomes, but by the extent to which it creates jobs, supports enterprise development, and improves the economic participation of young people,” the NYDA said.
The agency reaffirmed its commitment to advancing evidence-based policy solutions that place youth at the centre of South Africa’s economic response and long-term development trajectory. – SAnews.gov.za
