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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
October 3, 2025

Internation Trade and Trade Balance

August 2025

International trade measures South Africa’s demand for foreign goods and services relative to its demand for domestically produced products in the global market.

The country predominantly exports raw materials, including base metals, gold, other precious metals, and minerals, while importing value-added products such as vehicles, chemicals, and machinery.

In August 2025, South Africa recorded a trade surplus of R3.9 billion, indicating that exports once again exceeded imports for the month. Over the first eight months of 2025, total exports grew modestly by 1.6%, from R1,325.4 billion in 2024 to R1,346.4 billion. Meanwhile, imports rose slightly by 0.5%, from R1,236.6 billion to R1,243.1 billion. This reflects a small increase in international demand alongside continued caution among domestic consumers regarding imported goods.

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

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More Coverage

Retail Sales Performance

September 2025
Retail sales in South Africa rose by 3.1% in September, slightly exceeding market expectations of 3.0%, as anticipated by analysts for that month. This growth indicates a continuing recovery in consumer demand within the economy.

SARB Lowers Interest Rates as Stability Improves

The South African Reserve Bank (SARB) has taken a prudent and measured step by reducing its base interest rate from 7.0% to 6.75%, marking a significant moment in the country’s monetary policy trajectory. This decision, made by the Monetary Policy Committee (MPC), underscores the bank’s cautious optimism about South Africa’s economic outlook amidst a complex global backdrop.

Consumer Inflation

October 2025
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%.

Why Aluma does not Force an Interest Cut

Cautious Optimism Amidst Inflation and Reform Momentum
As the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) prepares to announce its interest rate decision later this week, market watchers are closely divided between expectations of a modest cut and maintaining the status quo. With approximately 70% of economists foreseeing a 25-basis point reduction from 7.00% to 6.75%, the prevailing sentiment reflects confidence in economic stabilization. However, a significant proportion remain cautious, suggesting that the SARB may choose to hold interest rates unchanged for another month, given the current inflation trajectory and recent developments in fiscal discipline.

Mining Production and Sales

September 2025
In September 2025, mining activity in South Africa increased by 1.2% year-on-year, after remaining unchanged in August.
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