South African Economy Bigger After Rebasing

South Africa’s economy shrank by 0.3% quarter-on-quarter in Q2 2026, following a 0.5% growth in the previous quarter, according to rebased data, compared with a previously reported contraction of 0.2% in Q2 and growth of 4.0% in the preceding period. The statistics agency announced a GDP rebasing using 2022 production patterns, adjusting sectoral weights to better reflect the structure of the economy. This rebasing revealed that South Africa’s economy is 4.9%, or ZAR 300 billion, larger than previously estimated, primarily due to the inclusion of growing activities such as online gambling, illegal mining, household solar, e-hailing, and online prostitution.

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.

The South African economy grew by 0.5% qoq in Q1 2026, up from a 0.4% rise in Q4 and slightly above forecasts of 0.3%, despite turbulence late in the period from the Iran war. This marked the sixth straight quarter of expansion and the strongest performance since Q2 2025, as nine of the ten industries registered growth. The finance, real estate and business services sector was the main contributor, rising 0.9%, followed by agriculture (+3.9%), trade (+0.7%) and transport (0.7%). Manufacturing, however, was the biggest drag, falling by 0.8%. From the demand side, net external demand contributed significantly (+0.9 percentage points), as exports rose 0.5% while imports fell 2.6%. Meanwhile, household consumption edged up 0.1% and government spending rose 0.6%, while fixed investment declined 1.1%. Changes in inventories subtracted 0.3 percentage points. On an annual basis, the GDP rose by 1.9% in Q1, accelerating from a 0.8% advance in Q4 and slightly above estimates of a 1.8% growth.