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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
July 29, 2025

Private Sector Credit Extension (PCSE)

June 2025

In June 2025, credit demand increased by 5.0%, aligning with market expectations for the month. Since the interest rate cuts began in September 2024, overall credit growth has accelerated, with most subcategories showing increases during June.

However, mortgage advances and credit for fixed asset purchases remain restrained, despite the ongoing interest rate cuts initiated in September 2024. Demand for property continues to be sluggish in South Africa, indicating low capital expenditure by households and businesses. High consumer debt levels, stagnant wages, and increasing living costs still constrain recovery in this sector. Nevertheless, the full benefits of lower interest rates are anticipated to materialise later in 2025, as household disposable incomes improve, driven by positive market sentiment and potential additional rate cuts by the South African Reserve Bank (SARB).

In June, instalment credit sales grew by 0.8% month-on-month, following a 0.9% increase in May, with an annual growth rate of 6.5%. Over the past two years, consumers have relied more on short-term credit to cope with rising living expenses, shown by a 7.1% increase in other loans and advances, up from 7.0% in May.

With inflation remaining favourable, continued rate reductions are expected to further enhance disposable incomes, promoting increased demand for goods and fixed assets in the second quarter of 2025 and beyond.

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More Coverage

Private Sector Credit Extension (PSCE)

September 2025
In September 2025, credit demand increased by 6.0%, slightly surpassing the previous month’s growth yet remaining just below the market expectation of 6.1%. Since the interest rate cuts began in September 2024, overall credit growth has gained momentum, with most subcategories recording increases from July to September 2025.

South Africa’s Economic Crossroads

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As South Africa prepares for the Medium-Term Budget Policy Statement (MTBPS) on November 12th, 2025, the nation faces a pivotal moment. The government’s ability to fund ambitious initiatives like the National Health Insurance (NHI), the R100 billion transformation fund, and infrastructure revitalisation depends fundamentally on creating a conducive economic environment that stimulates growth and broad-based prosperity.

Consumer Inflation

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In September 2025, the Consumer Price Index (CPI) saw a modest rise to 3.4%, slightly up from 3.3% in August, yet just below the analysts’ forecast of 3.5%.

Unleashing South Africa’s True Potential

A Bold New Blueprint for Sustainable Growth
South Africa’s economic trajectory is at a critical crossroads. After more than a decade of sluggish growth—averaging below 1% annually—the country faces an urgent need for bold, strategic action to unlock its full potential. Despite efforts at structural reform, global rating agencies like Moody’s confirm that current initiatives are insufficient to propel South Africa towards the government’s ambitious target of 3.5% annual growth by 2030. The reality is stark: unless we change course, we risk falling further behind.

Mining Production and Sales

August 2025
In August 2025, mining activity in South Africa declined by 0.2% year-on-year, following a 5.1% increase in July.
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