SA’s economy grew 0.8% in the second quarter of 2025, according to Stats SA data released on Tuesday, the strongest quarterly growth in two years.
The increase, which exceeded most forecasts, marks a notable acceleration from the revised 0.1% recorded in the first quarter. It was driven largely by gains in mining, manufacturing and household spending, and brings some relief after a sluggish start to the year, though growth remains uneven across sectors.
On an annual basis, GDP was up 0.6% compared with the second quarter of 2024.
“The stronger-than-expected bounceback in second-quarter GDP (largely technical) means we will revise our full-year 2025 growth forecast of 0.8% slightly higher, to just above 1%, while next year’s projection of 1.3% remains unchanged,” said Oxford Economics senior economist Jee-A van der Linde.
Mining and quarrying rebounded in the second quarter, expanding 3.7% and contributing 0.2 percentage points to overall growth, supported by higher output of platinum group metals (PGMs), gold and chromium ore. This follows a sharp 4.1% contraction in the first quarter, which dragged the sector into a technical recession.
Agriculture, the main wild card, expanded by a modest 2.5% after an upward revision of first-quarter growth from 15.8% to 18.6%.
The second-quarter “expansion was primarily due to the improved performance of certain field crops and the horticulture subsectors”, said Agbiz chief economist Wandile Sihlobo.
“As close observers of the sector know, the quarterly data tends to be somewhat volatile, influenced by times of harvest and crop deliveries, among other factors. It is particularly such issues that the second-quarter growth figure was much softer compared with the start of the year,” Sihlobo said.
According to Paul Makube, senior agricultural economist at FNB Commercial, “the latest outlook indicates better seasonal production conditions for the 2025/26 crop season with the La Niña weather pattern back in the forecast”.
He said: “This will boost agricultural activity with the onset of the summer crop season as the year tails off.”
The manufacturing sector increased 1.8%, contributing 0.2 percentage points to overall GDP growth. Seven of the 10 manufacturing divisions recorded growth.
The trade, catering and accommodation industry increased 1.7%, adding 0.2 percentage points to GDP, lifted by a stronger performance in retail, motor trade, accommodation, and food and beverages.
By contrast, the transport, storage and communication industry contracted 0.8%, subtracting 0.1 of a percentage point. This was attributed to declines in land transport and transport support services.
Construction declined 0.3%, weighed down by weaker activity in residential and non-residential building.
Investment
Household final consumption expenditure rose 0.8%, contributing 0.6 percentage points to overall growth.
However, gross fixed capital formation (investment in productive assets) remained under pressure, declining a sharp 1.4%, subtracting 0.2 percentage points from GDP. Investment in other assets fell 9.9%, while transport equipment and non-residential buildings also recorded notable declines.
Net exports subtracted 0.3 percentage points from expenditure on GDP. Exports declined 3.2%, led by weaker trade in base metals, vegetable products and vehicles. Imports were down 2.1%, reflecting lower demand for chemical products, machinery and mineral products.
An important reference in evaluating the GDP growth rate is the population growth, said Kevin Lings, Stanlib chief economist. “According to the most recent population estimate released by Stats SA, [the] population is growing by about 1.4% a year, which suggests that SA’s GDP performance has to at least exceed the population growth on an annual basis to be encouraging,” Lings said.
According to Van der Linde, the effect of US tariffs is expected to become more pronounced in the second half of the year. “The drop in the third-quarter business confidence suggests that economic activity is unlikely to pick up strongly in the near term, as firms adjust to higher US tariffs (now 30%) after starting the year with tariff-free access to the US market,” he said.
The challenge now is getting the economy up to the GNU’s growth target of 3% in the medium term, said Prof Raymond Parsons of the NWU Business School.
Looking forward to what appears to be a “mixed” third quarter, Parsons noted that one concerning factor is the negative trend in exports already evident in the second quarter at a time when global uncertainty is expected to intensify.
Another “weak link” is the continued negative performance of fixed capital formation, “which is the kingpin of sustained economic growth”.
“SA therefore now needs to build on — and expand — the incipient economic recovery,” he said.
Update September, 9 2025. This story has been updated with economists’ comments.
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