Three South African provinces are dangerously close to slipping into a technical recession after posting negative economic growth in the first quarter of 2025.
According to BusinessTech, new data shows that the North West, Limpopo, and Mpumalanga experienced economic contractions, while the rest of the country narrowly avoided decline – and the outlook for the second quarter remains bleak.
South Africa’s national GDP scraped by with 0.1% growth in Q1, masking stark provincial divides. The Free State and Western Cape led with 0.5% growth, followed by KwaZulu-Natal and Northern Cape at 0.4%. But economists warn the worst may still lie ahead.
Q2 forecasts: ‘Barely treading water’
With Q2 data still being calculated, early indicators suggest another dismal performance. Nedbank predicts just 0.3% growth, citing:
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Political chaos: GNU infighting over budgets stalled critical reforms
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Global shocks: Trump’s trade war and Middle East conflicts disrupted markets
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Local crises: Flood damage, water shortages, and mining/manufacturing slumps
‘There is growing urgency for South Africa to forge internal unity to strengthen external engagement,’ said Deloitte’s economic advisor, Hannah Marais. ‘We’re stuck in a slow-growth rut, held back by global uncertainty and long-standing domestic constraints.’
A perfect storm of challenges
The threats multiplying against South Africa’s economy include:
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US trade tariffs: A new 30% levy on SA exports
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AGOA uncertainty: Key trade deal hanging in the balance
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Operation Vulindlela delays: Reform programme losing steam
The latest economic data paints a concerning picture for South Africa’s growth trajectory.
While the national economy narrowly avoided contraction with 0.1% growth, regional disparities highlight underlying vulnerabilities.
The coming quarters will reveal whether the country can stabilise its most at-risk provinces and foster broader recovery or face deeper economic strain.
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Picture: Getty Images
Lulama Klassen
www.capetownetc.com
