South Africa’s Q2 2026 GDP contracts 0.2%, ending 18-month growth streak

In Q2 2026 South Africa’s gross domestic product fell 0.2%, ending a period of growth that began after the coalition government formed two years ago. The slowdown reflects reduced demand and rising fuel prices caused by the blockade of the Strait of Hormuz amid the Iran conflict, which hit the mining, trade and manufacturing sectors. Following the data, Goldman Sachs lowered its forecast for 2026 growth to 1.2% from 1.6%.

The country's central bank, having increased its main interest rate in May to curb war-related inflation, will hold its next rate-setting meeting this month, and Capital Economics believes the tightening phase is finished. Rising unemployment, now at a four-year high, has fueled anti-migrant sentiment and vigilante attacks ahead of November’s municipal elections.