South Africa’s economy contracted for the first time in nearly two years, with GDP falling 0.2% in the second quarter of 2026.

The downturn was driven by weakness across key sectors, including mining, manufacturing and trade. Mining output declined 3%, while manufacturing contracted 1.8% for its third consecutive quarterly decline. Trade also fell 1.9%, ending six consecutive quarters of growth.

Investment declined for a second straight quarter as businesses and public corporations reduced capital spending. The economy also shed 345,000 jobs during the quarter, while unemployment remained above 33%.

The slowdown comes as South Africa faces a politically sensitive period ahead of local government elections in November. Opposition parties are expected to target the government over weak growth, unemployment and rising living costs.

Economists now expect annual growth of around 1.2% to 1.5%, below the government’s earlier target.


South Africa Economy Crisis | GDP Contracts 0.2% As Jobs, Investment Take Hit

South Africa's economy narrowly avoided a technical recession in the December quarter. A decrease in rotating power interruptions helped with a recovery in energy-intensive sectors like mining. Gross domestic product rose by 0.1% in the three months through to December.

Mining boom helps South Africa avoid recession

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South Africa Economy Crisis | GDP Contracts 0.2% As Jobs, Investment Take Hit

Mining boom helps South Africa avoid recession