South Africa's Economy Shrinks 0.2% in Q2, Missing Forecasts

South Africa's economy slipped into a quarterly contraction in the three months to June, official data showed on Tuesday, as the country grappled with persistent power shortages and subdued consumer demand.

Gross domestic product (GDP) fell 0.2% in seasonally adjusted quarter-on-quarter terms, the statistics agency reported. The decline was steeper than the 0.1% drop economists had predicted in a poll, and it reversed the revised 0.4% expansion recorded in the first quarter of the year.

On an annual basis, the economy still grew, but at a slower pace than anticipated. GDP rose 0.9% in April-June compared with the same period a year earlier, falling short of the 1.2% growth forecast by analysts.

The data underscores the fragility of Africa's most industrialised economy, which has struggled to regain momentum amid rolling electricity outages and high borrowing costs. The contraction marks the first quarterly decline in a year, raising concerns about the sustainability of the recovery.