South Africa economy shrinks before local elections

South Africa's economy shrank 0.2 percent in the second quarter of 2026, ending a nearly two-year run of growth less than two months before local government elections, the national statistics agency said Tuesday.

StatsSA said gross domestic product fell from the previous quarter on a seasonally adjusted basis. Mining was the largest drag, shrinking 3 percent as production of platinum-group metals, manganese, gold and iron ore fell.

Trade contracted 1.9 percent after six straight quarters of growth. Manufacturing declined for a third consecutive quarter, with seven of its 10 divisions reporting weaker output.

StatsSA said rising imports and a second straight quarterly fall in investment also weighed on activity, while exports grew only modestly and businesses and public corporations pulled back on capital spending.

In June, StatsSA warned that fallout from the conflict in the Middle East, which began in late February and pushed fuel prices higher early in the year, could weigh on second-quarter economic activity.

The economy is expected to be a major issue in November's local government elections. Unemployment remains above 33 percent, and South Africa shed 345,000 jobs in the second quarter, with most losses in community and social services.

The ruling African National Congress lost its national majority in 2024 for the first time since the end of apartheid and entered a coalition government with rival parties.