South Africa’s economy expanded by a marginal 0.1% in the first quarter of 2025
South Africa’s economy expanded by a marginal 0.1% in the first quarter of 2025, largely driven by the agriculture sector, following downwardly revised growth of 0.4% in the last quarter of 2024, Statistics South Africa said on Tuesday.
Agriculture increased by 15.8% — contributing 0.4 percentage points to overall economic growth, as activity in horticulture and animal products ticked up.
The transport sector grew by 2.4%, contributing 0.2 points to GDP growth, while finance rose 0.2%, adding 0.1 points, and trade contributed 0.1 percentage points, the statistics agency said.
The manufacturing industry was the largest drag on GDP, decreasing by 2% during the quarter and detracting 0.2 percentage points, while electricity and construction contributed a negative 0.1 percentage points.
Expenditure on real GDP increased by 0.1% in the first quarter of 2025, driven by household final consumption expenditure, changes in inventories and exports.
Last week, the South African Reserve Bank downwardly revised its growth projection for the year to 1.2%, citing the “disappointing” activities in the mining and manufacturing industries and high unemployment, which edged up to 32.9% in the last quarter of 2024. The central bank expects growth to improve to 1.8% by 2027.
Economists at Nedbank expect economic growth for the remainder of this year to be boosted mainly by domestic demand, “supported by firmer consumer confidence, sustained by a recovery in real household incomes driven by lower inflation and lower debt service costs due to lower interest rates”.
“Despite minor progress on the structural front, operating conditions remain challenging, and production costs high. The weaker global recovery will weigh on output, particularly given South Africa’s elevated cost structures, underlying inefficiencies, and significant infrastructure constraints,” the bank said in a note.
“Accelerating structural reforms are the key to enhancing the international competitiveness of industries.”
These outcomes would boost the economy and create more jobs without suppressing supply, Nedbank said, predicting growth of 1% for 2025 and 1.5% on average over the next three years.