The economy had been on a structural turnaround since late 2024, notching up six straight quarterly expansions, and signalling its most stable period of growth in a decade thanks to easing electricity supply and gradual stabilization of public finances.

But the gains are set to be erased in the coming quarters, economists said.“We view the near-term outlook as increasingly challenging as rising inflation pressures stemming from the Middle East conflict-related supply disruptions weigh on household consumption and investment intentions,” said Gina Schoeman, an economist at Citi.

David Omojomolo, an economist at Capital Economics, said the first quarter data showed “weakness under the hood”, citing slower household spending — the country’s economic engine which “will make the Reserve Bank cautious

about delivering aggressive interest rate hikes.”

Goldman Sachs expects the central bank to deliver two more interest rate hikes this year to contain runaway inflation after last month’s 25-basis point hike.