South African’s Economy and the GDP Figures
Economists expect South Africa to record a quarterly decline in gross domestic product next week, with fixed investment set to recede for a second consecutive quarter.
SA will publish South Africa’s GDP numbers for the second quarter of the year next Tuesday (8 September), with the outlook tilted to the downside.
According to economists at Nedbank, South Africa’s real GDP growth likely weakened from 0.5% qoq in Q1 2026 to a contraction of around 0.2% qoq in Q2.
The banking group noted that high-frequency indicators point to weakness in mining, manufacturing, electricity, gas, and water, as well as domestic trade.
While agriculture and parts of the services sector likely remained supportive of growth, these gains would probably be insufficient to offset broader weakness elsewhere in the economy, it said.
These weaknesses would be particularly pronounced in sectors like construction, which are dependent on fixed investment to spur growth.
The construction industry’s contribution to South Africa’s economy almost halved to 2.3% of value added in 2025 from 4.2% in 2008, according to Statistics South Africa.
Investment has remained a key weakness in the government’s efforts to boost South Africa’s economic growth, with the country failing to achieve an annual average GDP growth of 1% over the past decade.
With investment forecast to decline by 0.7% next quarter, these pressures will likely persist.
The group expects investment to have receded by 0.7% in Q2. If the forecast is correct, fixed investment would be recording its second consecutive quarter of decline.
Fixed investment, or gross fixed capital formation (GFCF), declined by 1.1% in the first quarter of the year.
GFCF is a measure of the net addition of fixed assets, such as buildings, machinery, and infrastructure, in an economy and indicates investment trends.
Nedbank said that private-sector investment disappointed in Q1 and will likely disappoint again in Q2.
However, easing structural constraints, reduced risk premiums and continued investment in renewable energy should help lift outlays modestly above 2025’s even lower levels.
Public sector investment has also started to recover from a low base and is likely to provide additional support.”