South Africa’s economy experienced its first contraction in nearly two years during the second quarter, shrinking by 0.2 percent. The downturn, which was deeper than the 0.1 percent economists projected, was primarily driven by declines in the mining, manufacturing, and trade sectors. Statistics South Africa attributed the weak performance to the impact of the ongoing conflict involving Iran, which disrupted global energy markets, pushed up input costs, and dampened business sentiment. Additionally, increased imports and a decline in capital formation further weighed on economic output. While some sectors like construction and agriculture saw growth, it was insufficient to offset the broader contraction. The data presents a challenging backdrop for the South African Reserve Bank ahead of its upcoming monetary policy decision.