South Africa’s real gross domestic product expanded by 0.5% in the first quarter of 2026, beating market expectations of 0.3%, according to official data released by Statistics South Africa on Tuesday.
The positive performance marks the country’s sixth consecutive quarter of economic expansion, building on a revised 0.4% growth rate recorded in the final three months of 2025.
Broad-based gains drove the expansion, with nine out of ten industries reporting growth. The finance, real estate, and business services sector led the momentum, expanding by 0.9% during the period.
Agriculture, forestry, and fishing rebounded strongly by 3.9%, while the trade and transport sectors both grew by 0.7%. Mining output also rose on higher diamond and platinum group metal production.
Conversely, manufacturing remained a major drag on the index, contracting by 1.0% to register its second straight quarterly decline, heavily weighed down by petroleum and chemical product divisions.
Domestic demand showed underlying structural weakness as private sector fixed investment plummeted 4.9% quarter-on-quarter, prompting calls from opposition lawmakers for urgent structural reforms from economic ministers.
Despite the positive headline print, Statistics South Africa warned that the domestic economic outlook remains clouded by escalating external geopolitical shocks in the Middle East.
Officials noted the late February outbreak of the US-Iran war left Q1 data largely insulated, but predicted severe fuel price hikes would heavily impact second-quarter growth figures.
The South African Reserve Bank recently delivered a defensive interest rate hike and lowered its full-year 2026 growth forecast to 1.2% to anchor rising inflation expectations.
Economists project a sharp slowdown in subsequent quarters as compounding logistics costs, elevated interest rates, and soaring fuel prices pressure local consumers and depress broader business confidence.
