By Thebe Mabanga
South Africa’s economy outperformed expectations in the second quarter, with GDP expanding 0.8% year-on-year, driven by mining, manufacturing and strong household spending. Markets had forecast growth of between 0.5% and 0.6%.
“Following marginal growth of 0.1% in the first quarter of 2025, real gross domestic product strengthened by 0.8% in the second quarter,” Statistics South Africa (Stats SA) said.
Stats SA highlighted manufacturing, mining and trade as the main drivers on the production side of the economy, while household consumption and softer imports supported demand. Each of the three key sectors, manufacturing, mining & quarrying, and trade, catering & accommodation, contributed 0.2 percentage points to overall growth.
After two consecutive quarters of decline, both manufacturing and mining returned to growth.
Manufacturing output expanded by 1.8%, while mining rose by 3.7%—its fastest pace since the first quarter of 2021, when it grew by 4.4%, according to Statistics South Africa (Stats SA).
Consumer activity also strengthened.
The trade, catering and accommodation industry grew by 1.7%, its best performance since early 2022, while agriculture posted a third straight quarter of growth at 2.5%.
Gains in horticulture and animal products helped offset challenges such as the outbreak of foot-and-mouth disease.
A concerning trend in the GDP data was the continued decline in Gross Fixed Capital Formation (GFCF), which tracks investment in infrastructure and other fixed assets, as well as weakness in net exports, a measure of global demand for South African goods.
Government welcomed the stronger growth.
The Government Communication and Information System (GCIS) said the figures reflected a “broad-based recovery across key sectors of the economy,” noting that seven of the ten manufacturing sub-sectors recorded positive growth.
“Amid challenging global economic conditions, these figures demonstrate the resilience of South Africa’s economy,” GCIS said.
“Government views this as a positive sign of the impact of ongoing initiatives to stimulate growth, support local industries, and create jobs. Government remains committed to policies that foster inclusive and sustainable economic development for all South Africans.”
Nedbank, which had expected growth of 0.6%, struck an optimistic note for the rest of the year.
“We see the recovery gaining traction in the second half of the year. Households will continue doing the heavy lifting. Subdued inflation and lower interest rates will bolster real incomes, ease debt burdens and support household spending,” the bank said in a research note.
Still, it warned that fiscal constraints, uneven investment, and uncertainty over U.S. tariffs could weigh on momentum. Nedbank now forecasts overall growth of 1.2% for 2025, up from 0.5% in 2024.
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