South Africa is one of the most miserable countries in the world: index

High levels of unemployment have once again hit South Africa on the Bloomberg Misery Index, with the country now ranking as the second most economically miserable nation in the world.

The misery index, compiled by Bloomberg, is based on four key data points: Unemployment levels, interest rates, consumer prices and economic growth.

According to Bloomberg, the index relies on the age-old concept that low inflation and unemployment generally illustrate how good an economy’s residents should feel.

“Sometimes, of course, a low tally can be misleading in either category: Persistently low prices can be a sign of poor demand, and too-low joblessness shackles workers who want to switch to better jobs, for instance,” the news group said.

Like other countries in the top 10, South Africa performed poorly across all indicators – but its unemployment rate is what hits the hardest. It now ranks second on the index, after ranking fourth in 2017.

The index was released in the same month that South Africa received three bits of good news – a better than expected budget, a one percentage point drop in unemployment, and a slow down in inflation to 4.4% spurring hopes of rate cuts.

While these are all positive turns for the economy, the index is based on data preceding these announcements.

Notably, even though there is some short-term positivity around these moves, it does not remove the long-term impact of these indicators. South Africa’s unemployment rate, even at a marginally better 26.7%, is still one of the highest in the world.

Further, a VAT hike to 15% announced this week, to take effect in April, will also likely put pressure on consumer prices (another key indicator) while the country fights to push higher rates of economic growth.

Global performance

Looking at the top and bottom nations on the misery index, Venezuela has once again ranked as the most miserable country in the world – now the fourth time in a row – with hyperinflation being the main cause.

Hyperinflation in the country has become so bad that its misery index score is three times higher than it was in 2017 – and is almost 57 times bigger than South Africa’s, ranked number two. According to Bloomberg, Venezeula’s hyperinflation has left economists bewildered and unable to grasp any solid indication of growth.

The country’s unemployment data is also out of date.

On the lower end of the index – the least miserable places in the world – Thailand ranks as the happiest country once again, followed by Singapore and Japan.

Read: All the major tax changes you need to know about

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South Africa is one of the most miserable countries in the world: index