By Thebe Mabanga
Nedbank, one of South Africa’s leading commercial banks, expects the country’s GDP to rebound in the second quarter, supported by stronger mining and manufacturing output.
In a research note released on Monday, the bank projected GDP growth of 0.6% in Q2, up from 0.1% in the first quarter, ahead of Statistics South Africa’s official figures due next Tuesday.
According to Nedbank, mining and manufacturing staged a recovery in the second quarter, aided by more stable electricity supply, logistical improvements, steady global demand, and firmer domestic conditions. Mining output rose 3.9% quarter-on-quarter, reversing a 4.1% contraction in the first quarter.
“Manufacturing production increased by 1.6%, its strongest quarterly gain since Q2 2023. Growth was broad-based, with seven of the ten manufacturing divisions expanding,” the bank noted.
Agriculture, meanwhile, is expected to have moderated after a strong start to the year, when it was a key driver of first-quarter growth.
“Favourable weather conditions supported crops and horticulture, while animal diseases continued to weigh on livestock,” the outlook said.
Nedbank added that energy, mining, and manufacturing all benefited from reduced load-shedding, robust global demand, and firmer domestic demand.
Services also strengthened, led by transport and communications, finance, general government, and personal services.
“We expect some acceleration in growth during the remainder of the year. The main boost will come from domestic demand, underpinned by firmer consumer confidence and a recovery in real household incomes, supported by lower inflation and reduced debt-service costs from interest rate cuts,” South Africa’s smallest of the big five banks said in an upbeat outlook.
At the same time, it cautioned that despite ongoing structural reforms, “operating conditions remain challenging, and production costs high.”
Nedbank projects GDP growth of 1% in 2025 and an average of 1.5% over the next three years—well below the level needed to tackle unemployment.
The bank also warned that an uncertain global environment, higher US tariffs, and the possible expiry of AGOA pose “significant downside risks” to parts of the manufacturing sector.
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