South Africa GDP Growth Reaches Three Year High Driven By Key Sectors

TLDR

• South Africa’s GDP expanded 1.1% in 2025, up from 0.5% growth recorded in 2024.
• Agriculture output surged 17.4%, becoming a major driver of economic growth in 2025.
• Finance, real estate, and business services added 0.5% points to GDP growth.
• Manufacturing, electricity, and construction sectors recorded negative growth in 2025.

South Africa’s economy grew at its fastest pace in three years in 2025, supported by stronger activity in agriculture, finance, and trade. Statistics South Africa said GDP expanded by 1.1%, up from 0.5% in 2024. It marked the best growth since 2022. The improvement came despite long-standing electricity shortages and logistics problems that have slowed mining and manufacturing.

Sector Performance Supports Overall Economic Growth

Seven of the ten economic sectors recorded growth in 2025. Agriculture, forestry, and fishing showed the strongest increase. Output in the sector rose by 17.4% during the year. The sector contributed 0.4% points to overall GDP growth. Increased production of field crops and horticulture products supported the rise.

Finance, real estate, and business services also supported economic expansion. The sector grew by 1.9% and added 0.5% points to GDP growth. Higher activity occurred in financial intermediation, insurance services, and real estate.

Trade, catering, and accommodation expanded by 2.3%. This sector contributed 0.3% points to the annual growth figure. Higher activity was recorded in wholesale trade, retail trade, and motor trade. Transport and personal services also recorded modest growth. Transport and storage expanded by 0.8% during the year. Personal services increased by 0.4%.

Fourth Quarter Growth Exceeds Economists’ Expectations

Economic activity improved during the final quarter of 2025. The economy expanded by 0.4% in the three months ending in December. The figure was higher than the revised 0.3% growth recorded in the third quarter. It also exceeded the 0.3% median estimate from economists in a Bloomberg survey.

Finance and trade sectors led the quarterly expansion. Finance, real estate, and business services grew by 1.4% during the quarter. The sector contributed 0.3% points to quarterly GDP growth.

Trade, catering, and accommodation increased by 0.9% during the same period. Higher activity was reported in retail, wholesale trade, and accommodation services. Government services also expanded by 0.4% in the quarter. The increase followed higher employment levels in provincial and local government.

Some Key Industries Continue to Face Declines

Despite the overall growth, several industries recorded weaker performance. Manufacturing contracted by 0.6% during 2025. The sector reduced GDP growth by 0.1% points. Eight out of ten manufacturing divisions reported declines. The largest drops came from motor vehicles and transport equipment. Wood products, paper, printing, and food and beverage production also fell.

Electricity, gas, and water supply also recorded negative growth. Construction activity declined as well during the year. These sectors have faced challenges linked to energy supply and infrastructure limits. South Africa’s economy has grown at an average rate of less than 1% each year for more than a decade. Electricity shortages and logistics disruptions have limited expansion in key industries.

However, reforms have begun to improve economic sentiment. The National Treasury forecasts growth could reach 1.6% in 2026. It expects the growth rate to rise to around 2% by 2028.

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