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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
September 10, 2025

South Economic Performance

GDP, Economic Growth and Inflation for 2025Q2

South Africa’s economy experienced a commendable growth rate of 0.8% in the second quarter of 2025, exceeding the anticipated 0.5% expansion. This achievement occurred despite persistent international trade tensions, the cessation of U.S. aid, and impending trade tariffs on South African exports to the U.S., which commenced on August 7. Positively impacting growth were factors such as the interest rate cut in January, a stronger rand, stable confidence levels, and consistent electricity supply.

Of the ten economic sectors, Agriculture reported an impressive annual growth of 13.8%, with Finance growing by 2.2%, Trade by 2.5%, and Transport by 0.1%. Conversely, Electricity, Gas and Water shrank by 2.5%, Manufacturing by 1.2%, and Construction by 3.7%. Quarterly growth figures show Agriculture grew by 2.5%, building on an 18.6% rise in the prior quarter, primarily fueled by a bumper harvest and a 26% increase in exports to the U.S. for the quarter ending June 2025. Mining and Manufacturing increased quarterly by 3.7% and 1.8%, respectively, while Trade and the Finance sector expanded by 1.7% and 0.3%.

Looking ahead, the growth forecast for 2025 remains below 1.0%, largely due to the anticipated increased impact of U.S. trade tariffs from the third quarter. Despite the 0.8% growth in the second quarter, it did not alleviate South Africa’s unemployment issues, as the unemployment rate rose from 32.9% in the first quarter to 33.2% in the second quarter. Job losses are mounting in the third quarter, as U.S. trade tariffs directly affect businesses exporting to the U.S. market. The South African government is actively seeking new international markets for goods affected by U.S. tariffs and is working to address these trade barriers and diplomatic tensions with the U.S.

Addressing ongoing economic and structural challenges will require clear policy direction and progress on structural reforms. Enhancing diplomatic relations with the U.S. and ensuring the continuation of the AGOA agreement are vital. A stable rand, combined with low inflation and resolved U.S. trade and diplomatic issues, could potentially drive economic growth beyond current predictions.

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More Coverage

South Africa is trapped in severe economic stagnation, facing a projected 1.0% growth rate for 2026, 33.6% unemployment, and sharp contractions in mining (-12.7%) and manufacturing (-4.3%). Exposed to global fuel shocks via depleted reserves and >R12.00/litre pump levies, the nation is also caught in a fiscal spiral where national debt nears 80% of GDP and interest payments exceed R1 billion daily. Escaping this trap requires four urgent structural reforms: halting interest rate hikes for supply-side inflation, replacing rigid B-BBEE quotas with job-creation incentives, scrapping Expropriation Without Compensation (EWC), and deregulating Transnet’s logistics corridors.

Mining Production and Sales for August 2026

South Africa’s mining sector remains a vital source of jobs, foreign exchange and economic growth, but August’s sharp fall in mining output and sales highlights the mounting pressure on the industry. Rising fuel and energy costs, policy uncertainty and growing trade challenges are weighing on producers, even as firm gold prices and temporary US tariff exemptions offer some relief. Read the full report for a closer look at the latest figures, the forces shaping the sector and what they could mean for mining’s future in South Africa.

MACROECONOMIC & INVESTMENT INSIGHTS | OCTOBER 2026

A $100-plus oil price, a weaker rand and record fuel hikes are putting South Africa’s economy under mounting pressure, while strategic reserves offer little protection. This report examines how imported inflation is squeezing households and businesses, why higher interest rates may do little to tackle its root causes, and how sluggish growth and rising debt are tightening the fiscal squeeze. It also explores the stakes for trade with the United States and AGOA, and the policy choices that could restore investor confidence, unlock growth and put the country on a more resilient path.

International Trade and Trade Balance – August 2026

South Africa recorded a trade surplus of R20.4 billion in August 2026, as exports continued to outpace imports. Export growth has exceeded import growth over the first eight months of the year, reflecting subdued domestic demand among businesses and consumers. But with higher fuel prices and tighter monetary policy expected to weigh on spending, demand is likely to recover only gradually. Read the full report for a closer look at the trade figures and what they could mean for South Africa’s economy in the months ahead.

Private Sector Credit Extension (PSCE): August 2026

South Africa’s credit market is showing surprising resilience, with credit demand rising by 7.5% in August 2026 despite renewed interest-rate pressure, elevated inflation and mounting household costs. While mortgage advances continued to grow, the fragile recovery in the property market highlights the strain caused by subdued investment, high debt levels and rising municipal and energy expenses. At the same time, sluggish instalment credit growth and continued reliance on short-term borrowing reveal how consumers are navigating increasingly difficult financial conditions. With higher oil prices, geopolitical risks and further SARB tightening adding to the pressure, this report examines what the latest credit trends reveal about household finances, business confidence and the broader South African economy.