South Africa’s economy expanded by 1.1% in 2025, slower than projections by the South African Reserve Bank and National Treasury, according to data released by Statistics South Africa on Tuesday.
The country’s coalition government has been striving to lift growth, which has averaged below 1% annually over the past decade. Statistician-General Risenga Maluleke warned at a press conference that the modest growth rate is insufficient to reduce the nation’s persistent unemployment.
“1% growth should not send a lot of excitement out there … because such growth will not be able to contain the joblessness that we see,” Maluleke said.
The South African Reserve Bank had forecast a 1.3% increase in gross domestic product (GDP) last year, while the National Treasury predicted a 1.4% expansion.
Fourth-quarter growth stood at 0.4% on a quarter-on-quarter basis, slightly exceeding expectations, but at 0.8% year-on-year it fell short of the median forecast in a Reuters poll of economists.
Statistics South Africa reported that five of the ten sectors tracked grew in the fourth quarter, while five contracted. Growth was concentrated mainly in consumer-facing sectors, whereas primary and secondary sectors of the economy experienced shrinkage.
Despite the sluggish expansion, investor confidence improved in 2025 due to a stronger fiscal outlook and the government’s commitment to low inflation. Gross fixed capital formation rose 1.3% in the fourth quarter, marking the second consecutive quarter of growth, driven primarily by private sector investment.
Economists, however, stress that more substantial fixed investment is necessary to meaningfully accelerate economic growth in South Africa.
