South Africa: GDP Falls by 0.2%, Ending Six Quarters of Growth

South Africa’s gross domestic product shrank by 0.2% between April and June 2026 compared to the first quarter, according to data released Tuesday 8 September by Statistics South Africa. The continent’s leading industrial economy had not recorded a quarterly decline after six quarters of growth.

The contraction slightly exceeded market expectations. Economists surveyed by Reuters had anticipated a decline of 0.1%. First-quarter growth was also revised to 0.4%. Year-on-year, GDP grew by 0.9% in the second quarter, against a consensus forecast of 1.2%.

On the production side, mining, trade, and manufacturing weighed on activity. Imports also rose sharply, while investment declined for a second consecutive quarter. Household consumption, however, continued to increase.

Mining and Trade Drag Activity Down

Mining activity contracted by 3.0%, notably impacted by decreased production of platinum group metals, manganese, gold, and iron ore. Trade fell by 1.9% after six consecutive quarters of growth, amid weakness in wholesale trade, automotive, and food and beverage-related activities.

Manufacturing recorded its third consecutive quarterly decline. Seven of its ten subsectors contracted, with particularly significant negative contributions from food processing, furniture and other manufactured goods, as well as metals and machinery.

However, seven sectors showed growth. Transport and communications rose by 0.9%, supported by land transport. Construction advanced for a second consecutive quarter, while agriculture posted its seventh straight quarterly increase, driven notably by horticultural products and field crops.

Sharp Rise in Imports, Investment Still Falling

Imports surged by 4.9% in the second quarter, mainly due to purchases of machinery, electrical equipment, and mineral products. Exports increased by 0.9%, boosted notably by precious stones and metals.

Gross fixed capital formation, which measures investment in infrastructure and equipment, declined for a second consecutive quarter. Both private and public enterprises reduced their investments, while public administration increased theirs.

Household consumption grew by 0.4%, supported by spending on food, restaurants, and hotels. The figures published Tuesday mark a halt after a long period of growth, though not enough to define a recession, which typically requires several quarters of contraction.

This contraction comes less than three weeks after President Cyril Ramaphosa reaffirmed his goal to raise growth beyond 3% per year by 2030as part of a strengthened partnership between the state and businesses.

Statistics South Africa also plans to release in October the results of the base year change and recalibration of its national accounts, an operation likely to lead to revisions of some economic series.