Staff Reporter
The economy grew by 0.5% in the first quarter of 2026, extending its recovery from a 0.4% expansion in the previous quarter, Statistics South Africa said on Tuesday.
The finance, real estate, and business services sector was the biggest contributor to growth, expanding by 0.9% and adding 0.2 percentage points to GDP.
Stats SA said increased activity was recorded in financial intermediation and auxiliary activities.
Agriculture, forestry, and fishing grew by 3.9%, adding 0.1 percentage points, mainly due to stronger field crops and horticulture.
Trade, catering, and accommodation rose by 0.7%, supported by wholesale trade, motor trade, food and beverages, and accommodation.
Transport, storage, and communication also grew by 0.7%, with Stats SA saying “increased economic activities were reported for land transport, air transport and transport support services”.
Manufacturing remained a drag on output, contracting by 0.8% and subtracting 0.1 percentage points from GDP. Five of the 10 manufacturing divisions recorded negative growth, led by petroleum and chemicals, basic iron and steel, and wood, paper, publishing, and printing.
On the expenditure side, real GDP also increased by 0.5%, after a 0.3% rise in the fourth quarter of 2025.
Household final consumption expenditure rose by just 0.1%, while government consumption increased by 0.6%.
Gross fixed capital formation fell by 1.1%, subtracting 0.2 percentage points from growth, mainly because of lower investment in machinery and other equipment, residential buildings and other assets.
Stats SA said there was a “R22,4 billion drawdown of inventories”, with large decreases in manufacturing and trade, catering and accommodation contributing to the decline.
Net exports supported growth, contributing 0.9 percentage points to GDP expenditure.
Exports rose by 0.5%, while imports fell by 2.6%, mainly because of weaker trade in precious metals, mineral products, machinery and electrical equipment, textiles, and animal and vegetable fats and oils.
Stats SA said the GDP estimates were preliminary and could be revised.
It also said it was working with the South African Reserve Bank to change the base year for national accounts estimates to 2022, with rebased and benchmarked figures expected later in 2026.
