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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reductions later this year and government-approved infrastructure projects aimed at alleviating bottlenecks caused by outdated rail and port facilities in coastal regions that currently hinder international trade.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

A Watershed Moment: Global Ceasefire and Massive Oil Correction Offer Crucial Relief for the SA Economy

A sudden global shift has delivered much-needed relief for South Africa. Following a Middle East ceasefire, oil prices have dropped sharply and the Rand has strengthened—easing pressure on fuel costs and inflation. While earlier price spikes still weigh on the outlook, this combined correction offers a critical window for economic stability, improved consumer confidence, and renewed growth momentum.

The Great Fuel Buffer

South Africa finds itself balancing global energy shocks with decisive local action. As rising oil prices threaten to strain consumers and key industries, government intervention has softened the immediate impact—highlighting both the urgency of the moment and the need for smarter, more resilient fiscal tools to manage future volatility.

SARB opts for Strategic Resilience

The South African Reserve Bank has opted for a “hawkish hold,” maintaining the repo rate at 6.75% despite headline inflation hitting a milestone low of 3.0%. Governor Lesetja Kganyago emphasised that while the inflation target has been met, the MPC remains wary of a potential “energy tax” on the economy, driven by global oil prices surging above $100 per barrel. Consequently, the Bank has adopted a cautious, forward-looking stance, slightly lowering the 2026 GDP growth forecast to 1.1% to account for these external shocks and ensure long-term currency stability.

Navigating the Geopolitical Crosswinds

South Africa faces renewed inflation risks despite brief market relief, driven by rising fuel costs and import dependence. The SARB is likely to hold interest rates to protect price stability.

The Perfect Storm:

This morning, South Africans received what should have been a crowning achievement for the South African Reserve Bank (SARB). Data from Stats SA revealed that the Consumer Price Index (CPI) cooled to 3.0% in February, down from 3.5% in January. This lands the country perfectly on the SARB’s new, more ambitious inflation target.