SA’s economy expanded by 0.1% in the first quarter of 2025, according to data released by Stats SA on Tuesday, placing mining in a “technical recession” after two consecutive quarters of declining mining GDP statistics.
The GDP growth figure marks a slowdown from the revised 0.4% growth recorded in the fourth quarter of 2024 and falls just short of the 0.2% market consensus.
On an annual basis, real GDP was 0.8% higher than in the first quarter of 2024 but the slowdown was driven by continued weakness in key industrial sectors, particularly mining and manufacturing, which offset gains in agriculture and consumer spending.
“If present trends persist, the growth outlook for this year now seems likely to be only about 1%, possibly rising to about 1.5% in 2026,” North-West University Business School economist Raymond Parsons said.
The Treasury recently revised SA’s 2025 growth forecast down to 1.4%.
Agriculture remained the standout performer, expanding by 15.8% in the first quarter and contributing 0.4 of a percentage point to overall GDP. This follows a revised 17.7% increase in the fourth quarter of 2024, underlining the sector’s resilience after weather-related disruptions last year.
The increase was led by higher production of horticulture and certain field crops, with nominal gross value added rising by R29bn, bringing the total to R56bn.
“The production data at the farm level remains encouraging,” said Wandile Sihlobo, the chief economist at Agbiz. But he remained concerned about the livestock industry, primarily due to the recent outbreak of foot-and-mouth disease, adding that it “will become apparent later in the year”.
Mining, the quarter’s worst performer, contracted 4.1%, subtracting 0.2 of a percentage point from GDP. This marks a further deterioration from the revised 0.1% contraction in the previous quarter, with platinum group metals the main drag on output.
“The sector is in a technical recession. This is characterised by two consecutive quarters of declining mining GDP,” Minerals Council SA chief economist Hugo Pienaar said. “Disruptions to ... mining activity due to heavy rain in the northern provinces in January and February largely account for the underperformance,” Pienaar said.
Manufacturing declined 2%, contributing minus 0.2 of a percentage point to GDP. The revision to fourth-quarter data shows an even steeper prior contraction of 1.1%, previously reported as minus 0.6%.
Seven of 10 manufacturing divisions posted contractions, with petroleum and chemicals, food and beverages, and the automotive sector recording the steepest drops. Nominal output in the sector fell R31bn to R215bn.
The construction industry, which was revised down from a 0.4% to a 0.5% contraction in the fourth quarter, decreased 3.8% in the first quarter, contributing minus 0.1 of a percentage point to GDP as activity declined in residential building and construction work.
The transport, storage and communication industry grew 2.4%, contributing 0.2 percentage points to GDP, driven by increased land and air transport activity, and support services.
Finance (business services) rose 0.2% on stronger insurance and pension funding activity, remaining “SA’s most consistent growth dynamic, which is understandable given that the economy has become increasingly services based,” Stanlib economist Kevin Lings said.
On the demand side, household consumption expenditure, which makes up about two-thirds of GDP, rose 0.4% quarter on quarter, providing a mild cushion to broader economic weakness and contributing 0.3 of a percentage point to the total growth.
The main positive contributors to this increase include expenditure on transport, food and nonalcoholic beverages, restaurants and hotels, and health.
Gross fixed capital was also negative. “The poor performance of fixed capital investment as a key driver of growth raises a notable red flag, as capital investment is the kingpin of the growth rate,” Parsons said.
Net exports contributed negatively (minus 0.3 percentage points) to GDP expenditure. Exports of goods and services increased 1%, largely driven by trade in vegetables, vehicles and transport equipment, excluding minerals.
Imports of goods and services increased 2%, largely driven by trade in chemical products, mineral products, machinery and electrical equipment.
Update: June 3 2025
This story was updated to include more information and economists’ comment.
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