South Africa’s economy recorded a weak performance in the first quarter of 2025, growing by only 0.1% on a quarter-on-quarter basis, according to data released by Statistics South Africa (Stats SA). The marginal growth reflects the country’s ongoing economic challenges, as contractions in key sectors like mining and manufacturing wiped out gains from agriculture.
Despite a stronger-than-expected showing from the agriculture sector, which expanded by more than 15%, the mining industry shrank by 4%, while manufacturing dropped by 2%. These declines pulled down the overall output, raising concerns among experts and government officials.
South Africa, often regarded as Africa’s most industrialised economy, has struggled to regain strong momentum since the 2008–2009 global financial crisis. For over a decade, the country’s annual growth has averaged below 1%, a trend that continues to weigh heavily on employment, investment, and public confidence.
Though business and consumer sentiment has shown some improvement since the formation of a coalition government last year, the positive mood has not yet translated into significant increases in economic productivity.
The Statistician-General, Risenga Maluleke, said during a press conference on Tuesday that the slow pace of growth remains a major concern. “Our economy is not growing sufficiently, and at this rate, it is easy for it to slide into the negative,” Maluleke warned.
Tuesday’s GDP figure was slightly better than economists’ expectations. A Reuters poll had predicted that the economy would show zero growth for the quarter. Still, experts have described the data as a sign of an economic slowdown, not recovery.
To make matters worse, Stats SA also revised downward its estimate for fourth-quarter growth in 2024 to 0.4% from the previously reported 0.6%.
Capital Economics, a London-based research firm, noted in a report that South Africa’s economy appears to be losing momentum, adding that this could strengthen calls for interest rate cuts from the South African Reserve Bank (SARB).
“The weak data confirms that South Africa’s recovery is faltering. With inflation easing and growth stagnating, there is a stronger case for the Reserve Bank to begin loosening monetary policy soon,” the note stated.
Despite some optimism around economic reforms promised by the coalition government, structural issues such as logistics bottlenecks in port operations and rail freight continue to impede economic performance. Although government efforts are ongoing, progress has been slow and uneven.
Meanwhile, in year-on-year terms, South Africa’s GDP grew by 0.8% in the first quarter compared to the same period in 2024. This was slightly above analysts’ forecast of 0.7%, but still reflects a fragile economy.
The SARB last week cut its 2025 growth projection from 1.7% to 1.2%, citing weaker-than-expected performance in major sectors and a global slowdown impacting South African exports.
Analysts say South Africa’s path to recovery remains uncertain, especially with key sectors under pressure and no significant improvements in infrastructure, energy supply, and employment.
To address these challenges, economic experts have advised the government to accelerate structural reforms, invest in logistics, and ease the cost of doing business for the private sector.
While agriculture has shown resilience, contributing the largest share to Q1 growth, analysts warn that this alone cannot drive sustainable development.
Until reforms are implemented fully and consistently, South Africa’s economy may continue to tread water, vulnerable to both local disruptions and global economic headwinds.
