The good news is that, compared with gross domestic product (GDP) growth rates of 0,8% and 0,5% in 2023 and 2024, respectively, growth improved to 1,1% in 2025.

Prof. Raymond Parsons, economist from the North-West University (NWU) Business School, says the latest figures for 2025 that were released by StatsSA confirm that South Africa has been experiencing a slow and uneven economic recovery over the past year.

He says household spending continues to do much of the heavy lifting in sustaining economic activity.

“For sustained growth, it is encouraging that fixed capital formation, including infrastructure investment, has expanded again. On the other hand, manufacturing remained a lagging sector, shaving about 0,1 percentage points off GDP growth in the fourth quarter of 2025. The disappointing 1,1% growth rate in 2025 must be contrasted with the expected 1,6% growth in 2026 projected in the recent Budget, which may now prove somewhat optimistic. The Budget revenue projections also depend on the anticipated economic growth rate being realised.”

According to Prof. Parsons, the figures again underline that South Africa is still struggling to generate the momentum needed to expand the economy more rapidly and meet its socioeconomic expectations.

“Although there have been improvements in the macroeconomic environment, the challenge remains to show faster progress towards the growth target of the Government of National Unity of 3,5% by 2030. While the South African economy is more resilient than it was a couple of years ago, the latest growth figures show there are no grounds for complacency about the outlook.”

He says the domestic outlook is also vulnerable to new global uncertainties, including the possible economic implications of the US/Israeli war with Iran.

“The global and South African economies have entered a period of heightened uncertainty. In a worst-case scenario, if the conflict were to be prolonged, it could shave about 0,1 percentage points off growth in 2026, in addition to its inflationary consequences. This underscores the need for South Africa to accelerate structural reforms to strengthen economic resilience and improve the prospects for sustained, job-creating growth.”