South Africa’s Economy Records Sixth Straight Quarter of Growth

Stats SA said the country's gross domestic product (GDP) continued to show resilience despite a challenging global environment and emerging geopolitical risks.

South Africa's economy grew by 0.5% during the first quarter of 2026, extending its growth streak to six consecutive quarters, according to the latest figures released by Statistics South Africa (Stats SA). The modest expansion was driven mainly by stronger performances in the finance, agriculture, trade, and transport sectors, which helped offset weakness in manufacturing and other industries.

Stats SA said the country's gross domestic product (GDP) continued to show resilience despite a challenging global environment and emerging geopolitical risks. The finance industry was the biggest contributor to growth, expanding by 0.9% and contributing 0.2 percentage points to overall GDP growth. Agriculture also maintained its positive momentum, recording growth for a sixth consecutive quarter.

Strong Agricultural Output Supports Economic Performance

Agriculture expanded by 3.9% during the quarter, supported largely by increased production of field crops and horticultural products, particularly fruit. The sector has become one of the most consistent contributors to economic growth over the past year, benefiting from favourable production conditions and stronger export demand. Trade activity also remained positive, extending its growth run for a sixth straight quarter. Improvements in wholesale trade, motor trade, food and beverage sales, and accommodation services supported the sector's performance. Retail trade, however, recorded no growth during the period.

Transport and communication grew by 0.7%, with gains in land transport, air transport and transport support services helping the industry expand. Communications activity, however, declined during the quarter. Mining also contributed positively as production increased for platinum group metals, gold, chromium ore and diamonds. Manufacturing remained a concern for the economy as the sector contracted by 0.8%, marking its second consecutive quarterly decline. Lower output in petroleum and chemicals, iron and steel, and wood, paper and publishing industries weighed heavily on overall manufacturing performance.

Consumer Spending Rises Modestly as Imports Decline

On the expenditure side of the economy, growth was supported by reduced imports and increases in household consumption, government spending and exports. Household consumption grew by only 0.1%, the weakest increase recorded in eight quarters. Spending on utilities such as electricity and water, along with transport services, provided the largest boost. Consumers reduced spending on food, non-alcoholic beverages, alcoholic drinks, tobacco products and restaurant services.

Investment activity weakened during the quarter. Gross fixed capital formation declined by 1.1%, mainly because of lower spending on machinery, equipment and residential buildings. Exports increased by 0.5%, supported by stronger trade in mineral products, agricultural produce and processed food products. Imports declined as demand weakened for precious metals, machinery, electrical equipment, textiles and other goods.

Businesses also drew heavily from existing inventories to meet demand. Manufacturing, mining and trade companies collectively reduced stock levels, resulting in an annualised inventory drawdown of R22.4 billion. Manufacturing accounted for the largest share of this reduction.

Stats SA noted that the conflict in the Middle East, which intensified during the quarter, contributed to sharp fuel price increases in April. The agency indicated that the economic impact of higher fuel costs is likely to become more visible in second-quarter GDP figures, which are scheduled for release on 8 September 2026.