S&P downgrades SA's 2025 growth forecast as challenges persist

Six of the 10 industries on the production (supply) side of the economy recorded negative gains

- SIPHELELE DLUDLA

S&P Global Ratings has downgraded South Africa's economic growth forecast for 2025 following a subdued gross domestic product (GDP) print in the first quarter.

The South African economy kept its head above water in the first quarter of 2025, expanding by a marginal 0.1% compared with the fourth quarter of 2024.

Six of the 10 industries on the production (supply) side of the economy recorded negative gains, with mining and manufacturing being the biggest drags in the first quarter.

Mining weakened by 4.1%, with platinum group metals the most significant negative contributor. Coal, chromium ore, gold, copper and nickel also disappointed. Iron ore, manganese ore and diamonds recorded gains, but not enough to lift the industry into positive territory.

Manufacturing activity also slowed on the back of weaker production levels for petroleum and chemicals, food and beverages, and motor vehicles and other transport equipment.

After a 310-day hiatus, load shedding returned in the first quarter. This contributed to a 2.6% decline in electricity, gas, and water, marking the largest contraction since the third quarter of 2022.

S&P emerging markets chief economist, Elijah Oliveros-Rosen, said on Wednesday that they had lowered their growth projection for South Africa by 20 basis points (0.2 percentage points), mainly due to weaker-than expected activity so far this year.