South Africa’s economy expanded by 0.8% during the second quarter of 2025, following a marginal increase of 0.1% during the first quarter.
South Africa’s economy expanded by 0.8% during the second quarter of 2025, following a marginal increase of 0.1% during the first quarter, mainly driven by increased output in the manufacturing and mining sectors, Statistics South Africa said on Tuesday.
Eight of the 10 industries reported positive growth during the three months from April to June this year.
The mining sector increased by 3.7%, contributing 0.2 percentage points to the overall growth, with the largest contributions coming from platinum group metals, gold and chromium ore. The manufacturing sector added 0.2 percentage points to the GDP number, having increased by 1.8%.
“Seven of the 10 manufacturing divisions reported positive growth rates. The largest positive contributions were reported for the petroleum, chemical products, rubber and plastic products division and the motor vehicles, parts and accessories and other transport equipment division,” Stats SA said.
The trade, catering and accommodation industry grew by 1.7%, contributing 0.2 percentage points to the headline number as higher activities were reported for retail trade, motor trade, accommodation and food and beverages.
The agriculture sector was up by 2.5% and accounted for 0.1 percentage of the second quarter GDP growth.
“This was primarily due to increased economic activities reported in horticulture and animal products,” the statistics agency said.
The economy was dragged down by the transport and construction sectors during the second quarter.
The transport, storage and communication industry fell by 0.8%, as a result of reduced activity in the land transport and transport support services, while the construction industry saw a drop of 0.3%.
Expenditure on real GDP rose by 0.7% in the second quarter of 2025, following an increase of 0.2% in the first quarter of 2025. Household final consumption expenditure as well as government final consumption expenditure and changes in inventories contributed to this increase.
Nedbank economists are expecting an acceleration in economic growth for the rest of the year.
“The main boost will come from domestic demand, supported by firmer consumer confidence, sustained by a recovery in real household incomes driven by lower inflation and debt service costs due to reduced interest rates,” the bank said in a note.
“Despite ongoing structural reforms, operating conditions remain challenging and production costs high. Weaker global demand amid higher US tariff barriers will weigh on output, particularly given South Africa’s elevated cost structures, underlying inefficiencies, and significant infrastructure constraints.
“Accelerating structural reforms are the key to enhancing the international competitiveness of industries. This would enable the economy to grow faster and create more jobs without hitting supply bottlenecks, driving up costs, and stoking inflation.”
The bank forecasts GDP growth of 1% in 2025 and 1.5% on average over the next three years.