South Africa Reports Economic Recovery Amidst Persistent Challenges

Minister Ramokgopa Details Economic Progress

Pretoria, South Africa – Minister in the Presidency for Planning, Monitoring, and Evaluation, Maropene Ramokgopa, delivered an update on South Africa's economic recovery efforts on Friday, January 23, 2026. The Minister highlighted encouraging signs of growth and job creation, while also acknowledging the substantial hurdles that remain in achieving inclusive economic prosperity for all citizens.

GDP Growth and Declining Unemployment Noted

According to Minister Ramokgopa's report, South Africa's economy experienced a 0.8% Gross Domestic Product (GDP) growth in the second quarter of 2025. This marks the strongest quarterly performance since 2022, despite ongoing global economic volatility. Furthermore, the country's unemployment rate saw a notable decline, easing by 1.3 percentage points to 31.9% in the third quarter of 2025. This reduction was accompanied by the creation of approximately 248,000 new jobs during the same period. This represents the lowest unemployment rate since the fourth quarter of 2024.

Persistent Structural Challenges Remain

Despite the positive trends, Minister Ramokgopa underscored that significant structural challenges continue to impede a more comprehensive economic recovery. A critical concern is the persistently high rate of youth unemployment, which stands at an alarming 58.5%, signaling deep-seated issues within the labor market. Moreover, poverty and inequality remain deeply entrenched, reflected by a Gini coefficient of 0.63. The Minister emphasized that while progress is being made, more concerted efforts are required to ensure that economic recovery translates into tangible improvements in jobs, income, and overall well-being for all South Africans.

Government Initiatives and Future Outlook

The government's commitment to fiscal discipline was highlighted by the achievement of a primary budget surplus. Initiatives such as Operation Vulindlela are playing a crucial role in addressing structural constraints to economic growth, with reported progress in areas like energy reforms, logistics, and water infrastructure coordination. These efforts have contributed to improved system performance and boosted private-sector investment confidence. Additionally, South Africa's removal from the Financial Action Task Force (FATF) grey list has further enhanced investor confidence. However, investment levels are still constrained, and long-term growth is contingent on continued improvements in energy, freight rail, and port capacities, alongside the reduction of other structural barriers to economic activity.