GDP decline exposes South Africa’s uneven growth and jobs crisis
GDP contracts after six quarters of growth, exposing South Africa’s struggle to create jobs
South Africa's economic recovery has stalled, as the country's GDP contracted by 0.2% in the second quarter of 2026, marking six consecutive quarters of growth. Mining, trade, and manufacturing were the main contributors to the economic slowdown, as reported by Statistics South Africa (Stats SA). The contraction coincides with a rise in unemployment, with employment falling by 16,000 to 16.74 million, and the number of unemployed people increasing by 345,000 to 8.5 million.
This pushed the official unemployment rate from 32.7% to 33.6%. The biggest job losses were in community and social services, mining, agriculture, and manufacturing, with utilities also shedding jobs. While agriculture showed a seventh consecutive quarterly increase, driven by horticultural products and field crops, it still lost 15,000 jobs.
Construction added 39,000 jobs in the quarter, but trade contracted by 1.9%. The Statistician-General, Risenga Maluleke, attributed the decline in trade to weaker wholesale trade, motor trade, and food and beverage sectors, while retail trade and accommodation remained stronger. Dr Lerato Ntuli, an economist at Anchor Capital, noted that the weaker GDP performance was influenced by the Middle East conflict and the sharp increase in global oil prices.
She warned that higher fuel and crude oil prices would continue to pressure businesses and consumers. The uneven economic growth and job creation have intensified political pressure on the government to take swift action on reforms aimed at stimulating investment and creating employment.
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