SA’s economy grows 1.1% in 2025 as finance and agriculture Lead

Economy

Cape Town – South Africa’s economy recorded modest growth in the fourth quarter of 2025, with gross domestic product (GDP) expanding by 0.4%, according to the latest data released by Statistics South Africa.

The growth follows a 0.3% increase recorded in the third quarter of 2025.

“South Africa’s gross domestic product (GDP) increased by 0.4% in the fourth quarter of 2025, following an increase of 0.3% in the third quarter of 2025,” the agency said in its latest report on national accounts.

The finance, real estate and business services sector was the main driver of growth during the quarter, rising by 1.4% and contributing 0.3 of a percentage point to overall GDP growth.

According to the report, “increased economic activities were reported for other business services; financial intermediation, insurance and pension funding; auxiliary activities; and real estate activities.”

The trade, catering and accommodation industry also posted growth of 0.9%, contributing 0.1 of a percentage point to the overall expansion. Increased activity was reported across wholesale trade, retail trade, motor trade as well as food, beverage and accommodation services.

The personal services sector increased by 0.4%, while general government services also grew by 0.4%, largely due to higher employment levels in provincial and local government.

Agriculture, forestry and fishing recorded a 0.4% increase in output, which the report attributed primarily to stronger activity in field crops and horticulture products.

However, the manufacturing sector contracted by 0.6%, making it one of the main drags on economic growth during the quarter.

“Eight of the ten manufacturing divisions reported negative growth rates,” Statistics South Africa said, adding that the largest declines were recorded in the motor vehicles and transport equipment, wood and paper products, and food and beverages divisions.

On the expenditure side, real GDP increased by 0.3% in the fourth quarter of 2025 after rising by 0.4% in the previous quarter.

Household final consumption expenditure rose by 1.2%, contributing 0.8 of a percentage point to overall growth.

“Positive growth rates were reported for durable goods, non-durable goods, semi-durable goods and services,” the report said.

Spending increases were recorded across several categories, including transport, clothing and footwear, restaurants and hotels, recreation and culture, communication and health.

Final consumption expenditure by general government increased by 0.5%, largely driven by higher spending on goods and services and compensation of employees.

Gross fixed capital formation also increased by 1.3%, contributing 0.2 of a percentage point to growth, supported by gains in machinery and equipment, construction works and other assets.

However, net exports weighed on growth during the quarter. Statistics South Africa said exports of goods and services fell by 0.6%, while imports increased by 0.5%.

“Exports of goods and services decreased by 0.6%, largely influenced by decreased trade in vehicles and transport equipment excluding large aircraft; vegetable products; and prepared foodstuffs, beverages and tobacco,” the report said.

For the full year, the South African economy grew by 1.1% in 2025, up from 0.5% growth recorded in 2024.

The annual expansion was largely driven by stronger activity in finance, real estate and business services, which grew by 1.9%, as well as agriculture, forestry and fishing, which surged by 17.4%, and the trade, catering and accommodation sector, which expanded by 2.3%.

However, the manufacturing, electricity, gas and water, and construction industries recorded negative growth for the year.

Statistics South Africa also confirmed that it is in the process of rebasing the national accounts to a new base year of 2022.

“In line with international best practice, Statistics South Africa, in collaboration with the South African Reserve Bank, is in the process of changing the base year for national accounts estimates to 2022 and incorporating periodic datasets,” the agency said.

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Compiled by Betha Madhomu

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