South Africa’s GDP remained lethargic with an expansion of 0.1% q/q seasonally adjusted (not annualised) but still mildly above market expectations of a contraction. However, agriculture continues to be on the mend following the drought-induced contraction of 8.7% year-on-year (y/y) in 2024. Agriculture GDP outperformed other sectors after surging by 15.8% q/q (sa) in Q1 of 2025 with a largest contribution to quarterly growth 0.4 of a percentage point to the positive SA GDP growth.
This reflects a significant improvement in seasonal conditions that spurred field crops, horticulture, and animal subsectors which underpinned the Q1 spud in agriculture growth. Activity in field crops was robust with the summer crop (maize, soybeans, sunflower, sorghum, groundnuts, and drybeans) harvest rebounding by 15.7% y/y to almost 18 million tons.
This is accompanied by relatively strong commodity values with average prices for SA’s biggest stapple crop, maize, up by 39% and 18% y/y respectively y/y for white and yellow varieties in Q1 of 2025. An additional component of the field crops, sugar, is forecast to jump 7% y/y to 2.1 million tons. The horticulture industry also posted good gains with limited production disruptions due to the relatively higher dam levels for irrigation and sustained electricity. This saw good harvests for citrus, table grapes, and vegetables. The wine industry reported an 11% y/y growth in wine grape harvest at 1.24m ton, according to Vinpro. The livestock industry saw on average a 5% advance in meat prices and increased availability with red meat slaughter (cattle and pigs) up 1.5% y/y in Q1 of 2025.
On the export front, quarterly agriculture exports as per Trade Map data rose by 10% y/y to a total value of US$3.36 billion underpinned by higher volumes and prices despite the challenging global environment. The benign inflation and interest rate outlook following a 0.25% cut in May 2025 with a further reduction in the offing later in the year bodes well for the rebound in consumer demand and expansion in the agriculture sector.
