Economy barely grows in first quarter

South Africa's economy stagnated in the first quarter, eking out quarter-on-quarter growth of just 0.1% as contractions in sectors such as mining and manufacturing offset a strong performance by agriculture.

Africa's biggest economy has struggled to build momentum since the 2008-2009 global financial crisis, with annual growth averaging less than 1% over the past decade.

Business and consumer confidence has picked up since the formation of a government of national unity (GNU) last year, but that is yet to translate into higher levels of output.

Tuesday's data was marginally better than expected, as economists polled by Reuters had predicted GDP would be unchanged from the previous quarter in seasonally adjusted terms.

Analysts and the country's top statistics official said the weak growth was worrying.

“Our economy is not growing sufficiently, and at this state, it is easy for it to slide into the negative,” statistician-general Risenga Maluleke told a press conference.

The agriculture sector grew more than 15% in the first quarter, making the biggest contribution to growth, but mining shrank 4% and manufacturing 2%.

Stats SA revised down its estimate of fourth-quarter growth to 0.4% quarter-on-quarter, from an initial estimate of 0.6%.

Capital Economics said in a research note the data showed South Africa's economic recovery was losing momentum, strengthening the case for more interest rate cuts from the Reserve Bank.

The GNU is trying to lift the growth rate through reforms, but long-standing problems such as logistics bottlenecks at the ports and on the freight rail network are only slowly easing.

First-quarter GDP increased 0.8% year-on-year, vs forecasts for 0.7% growth.

Last week the Reserve Bank revised down its 2025 growth forecast to 1.2% from 1.7%.

Reuters