SA economy records growth thanks to positive contribution from agriculture

The South African economy has shown a 0.1% growth in the first quarter of 2025, according to data released by Statistics South Africa (Stats SA) on Tuesday.

Agriculture stood out as the biggest positive contributor, growing by 15.8%. This improvement added 0.4% to the gross domestic product (GDP).

“Good rains contributed to the industry’s fortunes, with horticulture benefitting the most. Animal products also fared well. Without this boost from agriculture, GDP would have contracted by 0.3%,” reads the report.

Transportation, storage, and communication also supported growth, with land and air transport services performing well.

Consumer spending gave the economy a further push, with trade, catering and accommodations increasing by 0.5%, while retail and motor trade, along with restaurants and hotels, added to gains.

Mining holds economy back

According to Stats SA, the mining and manufacturing spaces held the economy back as mining production dropped by 4.1%, making it one of the largest drags.

“Coal, chromium ore, manganese ore, and diamonds recorded gains, but not enough to lift the industry into positive territory,” reads the report.

“Manufacturing activity slowed on the back of weaker production levels for petroleum and chemicals, food and beverages, motor vehicles, and other transport equipment.

“Only three of the 10 manufacturing divisions experienced a favourable quarter, according to the latest monthly manufacturing release.

“These included textiles and clothing, wood, paper and publishing, radio, television and communication, and professional equipment.”

The report further shows that after 310 days without load shedding, power cuts returned early in 2025, and this showed a major impact on electricity and water supply.

Lower water consumption also added to the sector’s challenges.

Business cuts stock levels

On the spending side of the economy, growth was also modest at 0.1%

Inventory drawdowns, exports, and household consumption assisted in lifting the figures, while government spending held growth back.

Business continued to reduce stock levels, with R9-billion in inventory drawdowns across key industries, marking the fifth quarter in a row that this has happened.

“Exports expanded for a second straight quarter, rising by 1.0%. Vegetables, vehicles and transport equipment – excluding large aircraft – and mineral products underpinned the increase.

“Household consumption expanded for a fourth consecutive quarter, buoyed by a rise in spending on transport [particularly vehicles], food and non-alcoholic beverages, restaurants and hotels, miscellaneous goods and services and health.

“However, households cut back on recreation and culture as well as communication,” reads the report.

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