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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
July 7, 2025

International Trade and Trade Balance

May 2025

International trade measures South Africa’s demand for foreign goods and services compared to its demand for domestically produced products in global markets. The country primarily exports raw materials such as base metals, gold, precious metals, and minerals, while importing value-added products like vehicles, chemicals, and machinery.

In May 2025, South Africa recorded a trade surplus of R21.67 billion, indicating that exports once again exceeded imports for the month. Over the first five months of 2025, total exports increased by just 1.1% from R814.3 billion in 2024 to R823.3 billion. Meanwhile, imports declined by 1.2%, from R771.83 billion to R762.83 billion, reflecting a continued slowdown in demand.

Looking ahead, demand may experience slight growth in 2025, supported by a recent interest rate cut announced in late May. Lower interest rates, along with low inflation, a relatively stable and appreciated Rand against the US dollar, and reduced consumer and producer inflation, could further boost domestic demand in the coming months.

There is optimism that South Africa’s economy will build on the confidence gained in 2024, benefiting from low inflation and a less restrictive monetary policy. This positive outlook is supported by potential interest rate reductions later this year and government-approved infrastructure projects aimed at alleviating bottlenecks caused by outdated rail and port facilities in coastal regions that currently hinder international trade.

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More Coverage

The Core Dilemma: Demand vs. Supply and Interest Rates

The case for holding interest rates is strong, as South Africa’s current inflation is being driven by global supply-side pressures like fuel prices, not excessive local spending. Raising rates now would place additional strain on already struggling consumers and businesses without addressing the real cause of inflation. With the Rand strengthening, oil prices stabilising, and diesel costs expected to decline, natural inflation relief is already emerging. Since inflation remains within the SARB’s target range, increasing borrowing costs could unnecessarily slow economic growth and job creation.

A view on Demand in the Economy: Retail Sales performance – March 2026 Data

Amid a turbulent economic backdrop, South Africa’s retail sales surged by an unexpected 2.6% in March 2026, outpacing forecasts and signalling a fragile yet persistent recovery in the consumer market. While interest rate cuts have bolstered household spending, challenges such as rising inflation, potential interest rate hikes, and geopolitical tensions loom large. Despite these hurdles, sectors like “other retailers” and general dealers have notably contributed to this growth spurt, raising questions about the sustainability of this recovery. With business and consumer confidence indices displaying mixed signals, the future of South Africa’s retail strength hinges on international relations, fuel costs, and policy decisions. Explore the dynamics and implications of these developments in our detailed report.

Consumer Inflation Rate – 2026

In an insightful analysis of South Africa’s economic landscape in April 2026, the report delves into the notable 4.0% year-on-year increase in the Consumer Price Index, accentuated by surging costs in housing, utilities, transport, and financial services. Amid rising inflationary pressures fuelled by global uncertainties, including the Middle East conflict and climbing oil prices, the South African Reserve Bank faces critical decisions on interest rates to balance inflation and economic growth. As households grapple with diminished purchasing power, the precarity of reliance on short-term credit looms large, while international factors such as US-imposed tariffs and potential BRICS trade tensions threaten market stability. The report provides a comprehensive look at the delicate dance South Africa must perform to maintain price stability and safeguard the Rand amidst a challenging global backdrop.

The SARB’s High-Stakes Tightrope: Balancing an Inflation Breach Against a Jobless Crisis

Next week’s SARB decision could define South Africa’s economic trajectory: facing an external oil shock and runaway electricity tariffs that threaten to push April inflation past the central bank’s 4.0% ceiling, policymakers must weigh a technical inflation breach against a staggering surge in unemployment and collapsing investment, a choice between credibility and survival. With joblessness spiking and GDP growth stagnant, aggressive rate hikes would risk choking off the private investment the country urgently needs, while inaction could dent the new inflation-targeting framework. Read the full report for a detailed breakdown of the shocks driving this dilemma, the likely “hold” outcome from the May 28 MPC meeting, and what it means for businesses, households, and markets.

Mining Production and Sales for March 2026

In March 2026, South Africa’s mining sector showed promising growth, with activity up 2.5%, driven primarily by substantial increases in platinum group metals (PGM) and gold production. This article delves into the remarkable statistics, including a staggering 113.5% surge in platinum sales and a robust 30.2% increase in nominal mining sales, highlighting the industry’s crucial role in generating employment and foreign exchange for the economy. However, amid positive growth trends, the sector faces significant challenges, including geopolitical tensions, tariff measures, and the potential impacts of a changing global market. Discover how these dynamics affect one of the country’s key economic contributors and the overall outlook for the mining industry as South Africa navigates through a complex landscape of opportunities and hurdles. Read on for an in-depth analysis of the mining sector’s performance and its implications for South Africa’s economic future.