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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
September 2, 2025

International Trade and Trade Balance

July 2025

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

In July 2025, South Africa recorded a trade surplus of R20.2 billion, indicating that exports once again surpassed imports for the month. Over the seven months of international trade in 2025, total exports increased modestly by 1.3%, from R1,116.3 billion in 2024 to R1,175.6 billion. Meanwhile, imports declined slightly by 0.1%, from R1,076.6 billion to R1,175.5 billion. This reflects a modest rise in international demand and continued caution among domestic consumers regarding imported goods.

Looking ahead, demand may see slight growth in 2025, supported by a recent 25-basis-point interest rate cut announced at the end of July. Lower interest rates, combined with low inflation, a relatively stable and appreciated Rand against the US dollar, and stable consumer and producer prices, could help boost domestic demand in the coming months.

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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.