FX.co ★ South Africa Economy Expands More than Anticipated

The South African economy expanded by 0.5% quarter-on-quarter in Q1 2026, up from 0.4% in Q4 and slightly above analysts’ expectations of 0.3%. This was the sixth consecutive quarter of growth and the strongest outturn since Q2 2025, with nine out of ten industries reporting gains.

The financial sector was the largest positive contributor, increasing by 0.9%, followed by agriculture (+3.9%) and trade (+0.7%). Manufacturing was the main drag on growth, contracting by 0.8%.

On the expenditure side, net external demand made a substantial contribution of 0.9 percentage points, as exports rose by 0.5% while imports fell by 2.6%. Household consumption inched up 0.1%, and government spending grew by 0.6%, whereas fixed investment declined by 1.1%. Changes in inventories reduced growth by 0.3 percentage points.

Year-on-year, GDP increased by 1.9% in Q1, up from 0.8% in Q4 and marginally exceeding the consensus forecast of 1.8%.