South Africa’s economy expanded by 0.5% in the first quarter of 2026, marking a sixth consecutive quarter of growth despite ongoing pressure on households and key sectors of the economy.
The latest Gross Domestic Product (GDP) figures, released by Statistics South Africa (Stats SA), show that economic activity grew between January and March, supported mainly by the finance, agriculture, trade and transport sectors.
The finance industry was the largest contributor to growth, expanding by 0.9% and contributing 0.2 percentage points to overall GDP growth.
Agriculture also continued its strong performance, recording its sixth consecutive quarter of growth. The sector expanded by 3.9%, driven largely by increased production of field crops and horticultural products, particularly fruit.
Trade activity also strengthened for a sixth straight quarter, supported by wholesale trade, motor sales, accommodation and food and beverage services.
Positive results in land and air transport, as well as transport support services, helped lift the transport and communication sector by 0.7%.
Mining recorded growth during the quarter, supported by increased production of platinum group metals, gold, chromium ore and diamonds.
However, not all sectors shared in the gains.
Manufacturing contracted by 0.8%, marking its second consecutive quarterly decline. The downturn was largely driven by weaker performance in the petroleum and chemicals, iron and steel, and wood, paper and publishing divisions.
On the spending side of the economy, household consumption increased by only 0.1%, its weakest growth rate in eight quarters. Consumers spent more on essential services such as electricity, water and transport, while spending on food, restaurants, hotels and insurance products declined.
Government spending and exports also contributed positively to economic growth, while imports fell during the quarter.
Stats SA noted that exports increased by 0.5%, supported by stronger trade in mineral products, agricultural goods and food products.
Despite the positive GDP figure, economists warn that many households continue to face financial strain. The modest increase in consumer spending suggests South Africans are prioritising essential expenses while cutting back on discretionary purchases.
The effects of the ongoing conflict in the Middle East are also not yet reflected in the latest GDP data. According to Stats SA, the conflict began towards the end of February and its economic impact is expected to become more visible in the second quarter, particularly through sharply higher fuel prices experienced in April.
The second-quarter GDP figures, which will provide a clearer picture of the impact of rising fuel costs and global uncertainty on South Africa’s economy, are expected to be released on 8 September 2026.
While the latest figures point to continued economic resilience, the challenge remains translating growth into meaningful job creation and improved living conditions for millions of South Africans.
