JOHANNESBURG, March 10 (Xinhua) — Although South Africa's economy is expected to grow 1.1 percent in 2025, an economist warned Tuesday that the pace of expansion remains “slow and uneven” amid persistent structural challenges.
According to the latest data released by Statistics South Africa (Stats SA), the country's gross domestic product (GDP) grew by 0.4 per cent in the fourth quarter of 2025, the fifth consecutive quarter of economic growth.
Raymond Parsons, an economist at North-West University Business School, said the latest figures confirm that South Africa is experiencing a slow and uneven economic recovery over the past year.
Statistics SA data shows household final consumption expenditure is projected to increase by about 3.6 per cent in 2025, contributing about 2.4 percentage points to overall GDP growth.
Parsons said household consumption expenditure remained too much of a burden to sustain economic activity, while the improvement in fixed capital formation, including infrastructure investment, was encouraging for long-term growth prospects.
However, he cautioned that the 1.1 percent expansion compared to the 1.6 percent growth forecast for 2026 in the recent national budget is disappointing. “The budget revenue estimate also depends on the projected economic growth rate,” he said.
Stats SA also reported that nominal GDP at market prices reached about 7.6 trillion rand (about US$469 billion) in 2025, about 289 billion rand higher than in 2024, reflecting expansion in several key industries, including finance, trade, personal services and mining.
Despite these improvements, Parsons said South Africa is still struggling to generate the momentum needed to rapidly expand the economy and meet socioeconomic expectations.
Although the macroeconomic environment has improved, the country still faces the challenge of making rapid progress towards the government's goal of reaching a growth rate of 3.5 percent by 2030.
He also warned that the domestic outlook remains sensitive to global uncertainty, including potential economic fallout from geopolitical tensions involving the United States, Israel and Iran.
In a worst-case scenario, Parsons said prolonged conflict could reduce South Africa's growth by about 0.1 percentage point in 2026, as well as increase inflationary pressures.
“The global and South African economies have entered a period of extreme uncertainty,” he said, adding that this situation underlines the need for rapid structural reforms to strengthen economic resilience and support sustained, job-creating growth.