Economic growth picks up in the second quarter

GDP growth improves, as expected: As anticipated by our Consensus, the economy strengthened at a faster clip in the second quarter, with South Africa's GDP increasing 0.8% on a seasonally adjusted quarter-on-quarter basis, following a 0.1% expansion in the previous quarter. This marks the best result since Q3 2022.

Household spending does the heavy lifting: Relative to the prior period's data, figures in Q2 improved for private consumption—which accounts for roughly two-thirds of GDP—(+0.8% vs +0.5% in Q1), government consumption (+0.7% vs -0.2% in Q1) and fixed investment (-1.4% vs -1.5% in Q1). In contrast, readings softened for exports of goods and services (-3.2% vs +0.9% in Q1) and imports of goods and services (-2.1% vs +2.0% in Q1). Looking at sectoral data, growth was driven by the manufacturing, mining and trade sectors. In annual terms, economic output increased 0.6% in Q2, following 0.8% growth in the previous quarter.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects South African GDP projections for the next ten years from a panel of 25 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for South African GDP.

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