This growth was driven by record performances in the country’s agriculture, trade, and finance sectors.
According to a report released by the statistics office on Tuesday in the Southern African country’s capital, gross domestic product grew by 1.1%, as opposed to 0.5% in 2024.
The country has not experienced this level of growth since 2022, when it recorded 2.1% economic growth.
As seen on Bloomberg, electricity shortages and logistical bottlenecks that reduced mining and manufacturing output and discouraged investment contributed to South Africa’s economy underperforming for a decade, growing by an average of less than 1% yearly.
The National Treasury projects that the growth rate will rise from 1.6% this year to 2% by 2028.
This projected increment is attributed to the increasing pace of reforms, which has enhanced confidence and fostered positive expectations for the coming years.
Growth last year was driven by seven out of ten sectors, with farm output showing the most significant increase at 17.4%.
Other contributing sectors included trade, catering, and lodging (2.3%), finance (1.9%), and transportation (0.8%).
Recent wins in South Africa
In January, it was reported that the South African rand was enjoying its strongest weekly rally in more than two decades, bolstered by surging precious metal prices and signs of an improving economic outlook.
Additionally, the currency opened 2026 at its strongest level since 2022, supported by positive domestic trends, including ongoing economic reforms and higher metals prices.
Another report in the same month showed that South Africa’s inflation is on course to meet the South African Reserve Bank’s (SARB) revised 3% target in 2026, with prices remaining broadly stable.
The country’s current consumer price inflation (CPI) rate is 3.5%.
In 2025, the South African government and central bank cut the inflation target to 3% for the first time in 25 years, with a one-percentage-point tolerance band, despite previously anticipating that this aim would be met only by 2027.
