TLDR

  • South Africa’s GDP grew by 1.1% in 2025, an increase from the 0.5% growth seen in 2024.
  • Agricultural output jumped by 17.4%, emerging as a key contributor to economic growth in 2025.
  • Finance, real estate, and business services contributed 0.5 percentage points to GDP growth.
  • The manufacturing, electricity, and construction sectors saw negative growth in 2025.

South Africa’s economy registered its fastest growth in three years in 2025, buoyed by heightened activity in agriculture, finance, and trade. According to Statistics South Africa, GDP expanded by 1.1%, up from 0.5% in 2024. This marked the strongest growth since 2022. The uptick occurred despite persistent electricity shortages and logistical challenges that have hindered mining and manufacturing.

Sector Performance Supports Overall Economic Growth

Seven out of ten economic sectors recorded growth in 2025. Agriculture, forestry, and fishing posted the most significant gains. The sector’s output climbed by 17.4% over the year, contributing 0.4 percentage points to total GDP growth. This rise was underpinned by increased production of field crops and horticultural products.

Finance, real estate, and business services also bolstered economic expansion. The sector grew by 1.9% and contributed 0.5 percentage points to GDP growth. Elevated activity was observed in financial intermediation, insurance services, and real estate.

Trade, catering, and accommodation expanded by 2.3%, contributing 0.3 percentage points to the annual growth rate. Higher activity was noted in wholesale trade, retail trade, and motor trade. Transport and personal services also saw moderate 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 picked up during the fourth 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 forecast 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 rose 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 saw 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 registered 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 annual rate of less than 1% for over a decade. Electricity shortages and logistical disruptions have constrained expansion in key industries.

However, reforms have started to boost economic sentiment. The National Treasury projects growth could reach 1.6% in 2026. It expects the growth rate to climb to approximately 2% by 2028.