South Africa Economy Expands More than Anticipated

The South African economy grew by 0.5% quarter-on-quarter in Q1 2026, following a 0.4% rise in Q4 and slightly above analysts’ forecasts of 0.3%. This marked the sixth straight quarter of expansion and the strongest performance since Q2 2025, as nine of the ten industries registered growth. The financial sector was the main contributor, rising 0.9%, followed by agriculture (+3.9%) and trade (+0.7%). Manufacturing, however, was the biggest drag, falling by 0.8%. From the demand side, net external demand contributed significantly (+0.9 percentage points), as exports rose 0.5% while imports fell 2.6%. Meanwhile, household consumption edged up 0.1% and government spending rose 0.6%, while fixed investment declined 1.1%. Changes in inventories subtracted 0.3 percentage points. On an annual basis, the GDP rose by 1.9% in Q1, accelerating from a 0.8% advance in Q4 and slightly above estimates of a 1.8% growth.

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