The real gross domestic product (GDP) in South Africa grew 0.1% in the first quarter of 2025 from 0.4% growth recorded in the fourth quarter, Statistics South Africa‘s recent data indicate.
While the manufacturing sector lifted agriculture (+15.8%) and transport (+2.4%) among other sectors, the manufacturing sector’s 2.0% fall pulled aggregate growth back.
Local consumption showed minor gains, growing 0.4%, while gross fixed capital formation dropped 1.7%, showing investment confidence declining.
“The third-quarter GDP data put the precariousness of South Africa’s economic recovery in the spotlight,” said economic analyst Charles Makhoba.
“Though the transport and agriculture sectors performed well, abiding weaknesses in manufacturing, building, and mining are a challenge.”
The report highlighted trade performance concerns, with net exports subtracting 0.3 percentage points from the growth of GDP, the consequence of a 2.0% increase in imports outpacing the 1.0% rise in exports.
In addition, an A R9 billion drawdown in inventories underpinned the soft growth.
With the economy of South Africa continuing to record weak momentum, regional and international stakes are at the center.
Reducing investment activity may deter foreign capital inflows, while export problems can affect trade relations.
Economists are warning in the future that if structural reforms and policy measures are not implemented, economic growth may struggle to pick up pace in the second quarter of 2025.
As the nation is navigated through uncertain economic times, all eyes will be on the September announcement that will serve to project more accurately if South Africa can break free from its low-growth trap.
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