South Africa Economy Contracts More than Expected

2026-09-08 09:14 By Luisa Carvalho 1 min. read

South Africa's economy shrank by 0.2% qoq in Q2 2026, reversing the revised 0.4% growth recorded in Q1 and worse than the expected 0.1% decline.

This marked the first economic downturn since Q3 2024, snapping its longest quarterly growth run in almost a decade, amid the fallout from the Middle East conflict.

Three of the ten industries contracted, led by trade, catering and accommodation (-1.9%), while energy-intensive manufacturing and mining fell 1.8% and 3.0%, respectively.

Agriculture, however, provided some cushion, rising 0.3% on stronger activity in horticulture and field crops.

Other sectors also grew, including utilities (1%) and government services (1%) and transport, storage and communication (0.9%).

On the demand side, household and government consumption rose 0.4% each, while fixed investment fell 0.2%.

Net exports shed 1.1 points as exports rose 0.9% and imports 4.9%.

On a yearly basis, the GDP rose by 0.9% in Q2, down from 1.9% in Q1 and missing the expected 1% growth.



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South Africa Economy Contracts More than Expected
South Africa's economy shrank by 0.2% qoq in Q2 2026, reversing the revised 0.4% growth recorded in Q1 and worse than the expected 0.1% decline. This marked the first economic downturn since Q3 2024, snapping its longest quarterly growth run in almost a decade, amid the fallout from the Middle East conflict. Three of the ten industries contracted, led by trade, catering and accommodation (-1.9%), while energy-intensive manufacturing and mining fell 1.8% and 3.0%, respectively. Agriculture, however, provided some cushion, rising 0.3% on stronger activity in horticulture and field crops. Other sectors also grew, including utilities (1%) and government services (1%) and transport, storage and communication (0.9%). On the demand side, household and government consumption rose 0.4% each, while fixed investment fell 0.2%. Net exports shed 1.1 points as exports rose 0.9% and imports 4.9%. On a yearly basis, the GDP rose by 0.9% in Q2, down from 1.9% in Q1 and missing the expected 1% growth.
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