Skip to main content
Invest Now
012 012 5270
Copyright © Aluma Capital (Pty) Ltd. All rights reserved.
Aluma Capital (Pty) Ltd is a registered Financial Services Provider (FSP 46449) in terms of The Financial Advisory and Intermediary Services Act (37 of 2002)
Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
March 10, 2026

South African Economic Performance – GDP, Economic growth and Inflation for 2025Q4

The South African economy grew by 0.4% in the fourth quarter of 2025, slightly below market expectations of 0.7%. This modest growth comes despite positive economic indicators, interest rate reductions, and improved confidence levels during this period. Remarkably, overall, electricity supply constraints did not impede performance in 2025.

Among the ten sectors, seven showed annual growth. Notably, the Agricultural sector increased by 19.9% during the last quarter of 2025, despite US tariffs on imports from South Africa, while the Manufacturing sector contracted by 0.6% during this period. The Finance and Wholesale & Retail sectors grew by 1.4% and 2.6%, respectively, during the fourth quarter of 2025, indicating that lower interest rates, coupled with lower inflation, were starting to work through the economy holistically.  

Overall, South Africa’s economic growth for 2025 is estimated at 1.1%, a notable increase from 0.5% revised growth for 2024, which remains inadequate to address the high unemployment crisis. However, with increased market optimism heading into 2026, even with trade tensions between South Africa and the US and ongoing conflict in the Middle East between the US and Iran, no load-shedding, a lower interest rate, and an inflation rate of 3.5% and a target of 3.0% by the SARB, there is potential for improved economic activity going forward in 2026.

Challenges persist for businesses, and it is crucial for the government to deliver policy clarity and concrete progress on previously announced structural reforms. These structural reforms, coupled with Government infrastructure investment in the February 2026 budget, might just be the spark the South African economy needs for continued growth in 2026. It should however be mentioned that the extension of the AGOA agreement for only 2026 and a possible expulsion of South Africa from this agreement will most likely still threaten South African businesses exporting to the U.S. Addressing these critical issues is essential to boost business confidence further for the year, which is necessary for driving significant economic growth in the coming months—a need that South Africa cannot overlook at this stage.

Back to News

More Coverage

South Africa is trapped in severe economic stagnation, facing a projected 1.0% growth rate for 2026, 33.6% unemployment, and sharp contractions in mining (-12.7%) and manufacturing (-4.3%). Exposed to global fuel shocks via depleted reserves and >R12.00/litre pump levies, the nation is also caught in a fiscal spiral where national debt nears 80% of GDP and interest payments exceed R1 billion daily. Escaping this trap requires four urgent structural reforms: halting interest rate hikes for supply-side inflation, replacing rigid B-BBEE quotas with job-creation incentives, scrapping Expropriation Without Compensation (EWC), and deregulating Transnet’s logistics corridors.

Mining Production and Sales for August 2026

South Africa’s mining sector remains a vital source of jobs, foreign exchange and economic growth, but August’s sharp fall in mining output and sales highlights the mounting pressure on the industry. Rising fuel and energy costs, policy uncertainty and growing trade challenges are weighing on producers, even as firm gold prices and temporary US tariff exemptions offer some relief. Read the full report for a closer look at the latest figures, the forces shaping the sector and what they could mean for mining’s future in South Africa.

MACROECONOMIC & INVESTMENT INSIGHTS | OCTOBER 2026

A $100-plus oil price, a weaker rand and record fuel hikes are putting South Africa’s economy under mounting pressure, while strategic reserves offer little protection. This report examines how imported inflation is squeezing households and businesses, why higher interest rates may do little to tackle its root causes, and how sluggish growth and rising debt are tightening the fiscal squeeze. It also explores the stakes for trade with the United States and AGOA, and the policy choices that could restore investor confidence, unlock growth and put the country on a more resilient path.

International Trade and Trade Balance – August 2026

South Africa recorded a trade surplus of R20.4 billion in August 2026, as exports continued to outpace imports. Export growth has exceeded import growth over the first eight months of the year, reflecting subdued domestic demand among businesses and consumers. But with higher fuel prices and tighter monetary policy expected to weigh on spending, demand is likely to recover only gradually. Read the full report for a closer look at the trade figures and what they could mean for South Africa’s economy in the months ahead.

Private Sector Credit Extension (PSCE): August 2026

South Africa’s credit market is showing surprising resilience, with credit demand rising by 7.5% in August 2026 despite renewed interest-rate pressure, elevated inflation and mounting household costs. While mortgage advances continued to grow, the fragile recovery in the property market highlights the strain caused by subdued investment, high debt levels and rising municipal and energy expenses. At the same time, sluggish instalment credit growth and continued reliance on short-term borrowing reveal how consumers are navigating increasingly difficult financial conditions. With higher oil prices, geopolitical risks and further SARB tightening adding to the pressure, this report examines what the latest credit trends reveal about household finances, business confidence and the broader South African economy.