South Africa’s economy contracted by 0.2% quarter-on-quarter in Q2 2026, following a downwardly revised 0.4% expansion in Q1 and exceeding market expectations of a 0.1% decline. This was the first quarterly downturn since Q3 2024, ending the country’s longest growth streak in nearly a decade, as the economy felt the impact of the conflict in the Middle East.
Out of ten major industries, three recorded contractions. Output in the trade, catering and accommodation sector declined by 1.9%, while energy-intensive manufacturing and mining fell by 1.8% and 3.0%, respectively. Agriculture offered a modest offset, expanding by 0.3% on the back of stronger activity in horticulture and field crops.
On an annual basis, GDP increased by 0.9% in Q2, a marked slowdown from the 1.9% growth recorded in Q1 and slightly below the 1.0% expansion anticipated by markets.
