SA GDP Grows by 1.1% in 2025

South Africa’s GDP grew by 1.1% in 2025, an increase from the 0.5% recorded in 2024 but slightly below consensus forecasts.

It was the highest rate of annual growth in the past three years (growth in 2023 had been 0.8% and in 2024 had been 0.5%) but still far below the rate needed to reduce South Africa’s very high rates of unemployment and poverty.

The sector that grew the most in 2025 was agriculture, which expanded by 17.4%. The trade, catering, and accommodation sector (which grew by 2.3%) and the finance, real estate, and business services sector (which grew by 1.9%) were the next two fastest-growing sectors. Mining saw a slight expansion, of 0.2%.

The sectors that declined the most were construction, which shrank by 4.4%, and electricity, gas, and water, which declined by 4.3%. Manufacturing also shrank, by 1.2%.

As The Common Sense noted this morning (this newspaper had anticipated a growth rate of between 1.2% and 1,4%), without a strong increase in the fixed investment rate, to between 20% and 25% of GDP, rather than the 15% of GDP, which is the case now, South Africa will be stuck with low economic growth. The only solution to lifting the fixed investment rate is to implement reforms around issues such as black economic empowerment (BEE), property rights, energy, logistics, and foreign policy. However, the scale of reform needed is far beyond what the current government is considering.

As The Common Sense reported this morning, the reforms that are necessary are as follows: “On BEE, the extent to which the policy taxes capital would need to be abandoned. On property rights, expropriation law would need to be redrafted to make clear that assets cannot be taken by the state for less than market-related compensation. On energy, South Africa’s defunct coal plants would need to be refitted at scale, while on logistics, private operators need to be given full management control of port and rail operations. Foreign policy would need to shift from ideological grandstanding to deal-making in order to strike significant new investment pacts with both Washington and Beijing.”