If South Africa's GDP increased by 6% in 2025, but inflation was 4% during the same period, what can we infer about real GDP?

To determine the real GDP growth, we need to adjust the nominal GDP growth for inflation.

• Step 1: Identify the given values.

  • Nominal GDP growth rate = $6\%$
  • Inflation rate = $4\%$

• Step 2: Use the formula for approximating real GDP growth:

  $$\text{Real GDP Growth Rate} \approx \text{Nominal GDP Growth Rate} - \text{Inflation Rate}$$

• Step 3: Substitute the given values into the formula.

  $$\text{Real GDP Growth Rate} \approx 6\% - 4\%$$ $$\text{Real GDP Growth Rate} \approx 2\%$$

• Step 4: Compare the calculated real GDP growth rate with the given options. The real GDP grew by about $2\%$.

The correct option is B.
B. Real GDP grew by about 2%