SOUTH AFRICA’S ECONOMY SHRINKS 0.2% AS GROWTH STREAK COMES TO AN END

South Africa’s economy contracted by 0.2 per cent in the second quarter of 2026, bringing an end to six consecutive quarters of economic growth. Data released by Statistics South Africa showed that the economy performed worse than the 0.4 per cent growth recorded in the first quarter, marking the first quarterly contraction in almost two years. On a year-on-year basis, however, the economy still expanded by 0.9 per cent between April and June.

The decline was largely driven by weak performances in mining, manufacturing and trade-related activities. Mining and quarrying contracted by 3 per cent, with lower production of platinum group metals, manganese, gold and iron ore weighing heavily on the sector. Manufacturing also declined by 1.8 per cent, with seven of its 10 divisions recording negative growth, while the trade, catering and accommodation sector fell by 1.9 per cent.

The latest figures also showed pressure on the expenditure side of the economy. Imports jumped by 4.9 per cent during the quarter, while investment declined for a second consecutive quarter. Household consumption, however, increased by 0.4 per cent, supported by higher spending on food, beverages, restaurants and hotels. Exports also rose by 0.9 per cent, helped by increased shipments of precious metals and other commodities.

Despite the overall contraction, some sectors recorded growth and helped limit the scale of the downturn. Transport, storage and communication expanded by 0.9 per cent, while finance, real estate and business services grew by 0.3 per cent. Government services and personal services also recorded increases, while agriculture posted its seventh consecutive quarterly expansion, driven by stronger production of horticultural products and field crops.

The weak GDP figures highlight continuing structural challenges facing Africa’s most industrialised economy, including difficulties affecting mining, manufacturing, logistics and investment. The contraction also comes amid heightened global economic uncertainty linked to the conflict involving Iran and its impact on energy prices and domestic demand. South African authorities will now face pressure to strengthen economic activity and address persistent constraints as the country seeks to return to a sustained growth path.