South Africa’s Misses Forecast As Economy Grows By 1.1%

South Africa’s economy expanded by 1.1 per cent in 2025, falling short of projections by both the central bank and the National Treasury, according to new data released by Statistics South Africa.
The figures showed that the modest growth underscores the country’s continued struggle to accelerate economic expansion after more than a decade of weak performance.
Speaking at a press conference, Statistician General, Risenga Maluleke, said the growth rate remained insufficient to address the country’s persistent unemployment challenge.
Maluleke noted that “1 per cent growth should not send a lot of excitement out there because such growth will not be able to contain the joblessness that we see.”
The latest performance came below forecasts by the South African Reserve Bank and the National Treasury of South Africa, which had projected economic expansion of 1.3 per cent and 1.4 per cent respectively for the year.
Data from the statistics agency showed that the economy recorded a 0.4 per cent quarter-on-quarter growth in the fourth quarter, slightly above expectations. However, on a year-on-year basis, the economy grew by 0.8 per cent during the period, below the median estimate in a Reuters poll of economists.
Sectoral performance remained mixed, with five out of the 10 sectors tracked by Statistics South Africa posting growth in the fourth quarter, while the remaining five sectors contracted. The report indicated that the limited expansion was largely driven by consumer-facing sectors, while the primary and secondary sectors of the economy experienced declines.
Despite the subdued growth, Africa’s most industrialised economy witnessed a rise in investor confidence during the year, supported by an improving fiscal outlook and the government’s commitment to maintaining low inflation.
The data also showed that gross fixed capital formation increased by 1.3 per cent in the fourth quarter, marking the second consecutive quarter of expansion. The improvement was largely driven by private sector investment.
South Africa’s coalition government has been pushing for stronger economic performance after the country’s growth averaged below one per cent annually over the past decade. Analysts say sustained investment and stronger performance in the productive sectors will be required to achieve a meaningful economic turnaround.