South Africa’s Economy Surprises with Stronger GDP Growth in Q2 2025

South Africa’s economy pulled off a rare positive surprise in the second quarter of 2025, with GDP growing by 0.8% quarter-on-quarter, well ahead of economist forecasts. The news briefly strengthened the rand, which had dipped earlier in the day as markets held their breath for the official data release.

But while the numbers brought a flicker of relief, they also raised questions: can this momentum hold, or is it a short-lived reprieve before the weight of new US tariffs begins to bite.

Manufacturing and Mining Spark the Rebound

Stats SA figures show that key industries helped lift growth. Manufacturing grew 1.8%, buoyed by chemicals, plastics, and motor vehicle production, while mining expanded 3.7%, thanks to higher output in platinum, gold, and chromium ore.

Trade, catering, and accommodation also posted gains, with South Africans spending more in shops, restaurants, and hotels. Economists noted that this broad-based improvement was a welcome shift after sluggish first-quarter results.

Where the Economy Fell Short

Not all sectors shared in the good news. Transport and storage dipped by 0.8%, reflecting ongoing struggles with South Africa’s freight and logistics networks. Construction also slipped slightly, with weaker activity in residential and non-residential buildings.

On the trade side, exports fell 3.2%, especially in base metals and vehicles, while imports dropped by 2.1%. Net exports ultimately dragged down GDP, highlighting the fragile state of South Africa’s global competitiveness.

Economists React: Relief, But With Caution

Before the data release, economists from Reuters and Nedbank had expected growth of around 0.5% to 0.6%. The stronger outcome was a pleasant surprise, but many remain cautious.

As one local analyst put it on X (formerly Twitter): “It’s great to see upside momentum, but let’s not kid ourselves. 0.8% doesn’t solve unemployment or outpace population growth.”

That sentiment echoed widely on social media, where ordinary South Africans celebrated the headline but quickly pointed out that daily struggles with rising costs, load shedding, and weak job creation remain unchanged.

The Tariff Storm on the Horizon

Perhaps the biggest shadow hanging over the economy is geopolitical. The Q2 figures cover April to June 2025 just before the United States slapped a 30% tariff on South African exports in August.

The tariffs, one of the harshest applied by President Donald Trump’s administration, are expected to hit manufacturing and the auto sector hardest. Economists say the impact may start showing in the third quarter and weigh heavier by year-end.

Nedbank forecasts modest growth of 0.3% in Q3 and 0.5% in Q4, leaving South Africa with around 1% total growth in 2025. Others are less optimistic, warning that tariffs could shave off 0.2 to 0.3 percentage points, pulling full-year growth closer to 0.7%.

Why This Matters

For ordinary South Africans, GDP numbers can feel abstract, but they carry real consequences. Weak growth means fewer jobs, lower tax revenues for public services, and less room for households to breathe.

The Government of National Unity has promised reforms to tackle logistics bottlenecks and spur investment, but with global headwinds intensifying, the road ahead looks anything but smooth.

Source: Business Tech 

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