South Africa's economy contracted for the first time in nearly two years in the second quarter of 2026, official data released on Tuesday, 8 September showed, as the war in Iran weighed on domestic demand and negative performances in the mining and manufacturing sectors penalised overall economic activity.
Gross domestic product (GDP) shrank by 0.2% quarter-on-quarter on a seasonally adjusted basis. Economists polled by Reuters had forecast a contraction of 0.1%.
The decline was driven primarily by output reductions in the mining (-3.0%), manufacturing (-1.8%), and trade (-1.9%) sectors.
"The situation in the Middle East was clearly reflected in these numbers. The question we cannot yet answer is how long this will persist, particularly in the manufacturing sector," said Joe de Beer, head of economic statistics at Statistics South Africa.
De Beer added that third-quarter data would be critical in determining whether South Africa's full-year growth rate for 2026 could exceed current economist forecasts, which point to expansion of between 1.2% and 1.5%.
Before the outbreak of the Iran war at the end of February, the National Treasury had targeted growth of 1.6% for the year. However, the subsequent rise in domestic fuel prices has since clouded the economic outlook.
"Higher fuel prices have clearly hit demand in South Africa very hard," said Razia Khan, Standard Chartered's chief economist for Africa, in emailed comments.
Household spending, one of the key drivers of the South African economy, remained in positive territory in the second quarter, although fixed investment recorded another decline.
Looking to the third quarter, Raymond Parsons, economist at the North-West University Business School, said: "The evidence points to an economy whose recovery has been interrupted and delayed, not to an economy whose recovery has been definitively derailed."
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/09/08/mundo/africa/africa-do-sul-economia-quebra-ciclo-de-crescimento-e-recua-02/
