Statistics South Africa has reported that the country’s gross domestic product grew by 0.6% in real terms during the fourth quarter of 2025, outpacing the consensus analyst forecast of 0.4% and providing welcome — if cautious — evidence of economic resilience heading into a year of significant cost-of-living pressures.
The growth was driven primarily by a solid performance from the finance, insurance, real estate and business services sector, which benefited from improved confidence metrics in the wake of the extended load shedding pause. The wholesale and retail trade sector also contributed positively, with December retail sales stronger than expected despite ongoing consumer pressure.
Agriculture posted a notable contraction during the quarter following a difficult harvest season in several key farming regions. The mining sector delivered a mixed performance, with platinum group metals output recovering from earlier disruptions but gold production continuing its longer-term structural decline.
GDP growth for the full year 2025 came in at 1.3%, consistent with Treasury forecasts but well below the 3% minimum that economists regard as necessary to meaningfully reduce South Africa’s unemployment rate. Treasury has projected growth of 1.8% for 2026, though the fuel price shock of April 2026 has already prompted several banks to revise those projections downward.
The Reserve Bank governor indicated in his most recent Monetary Policy Committee statement that while the growth trajectory is encouraging, the inflation risks stemming from higher fuel and electricity costs will need to be carefully assessed before further interest rate cuts are considered. Most analysts now expect the next rate adjustment to be delayed until at least the third quarter of 2026.
