The economy grew for the fourth consecutive quarter, its longest period of sustained growth since the post-Covid recovery began in 2021.
The performance was broad-based, with nearly all sectors (except electricity) recording modest gains.
The 0.5% quarter-on-quarter expansion — primarily driven by mining, agriculture, trade, catering and accommodation — is slightly slower than the 0.9% recorded in the second quarter and comes as President Cyril Ramaphosa basks in the success of the G20.
“Favourable commodity prices are supporting mining’s catch-up following a slow start to 2025 and a dismal 2024,” Oxford Economics senior economist Jee-A van der Linde noted.
Year on year, this brings the real GDP growth rate to 2.1%, and the nine-month on nine-month rate to 1.2%, in line with the Treasury’s full-year forecast.
But independent economist Elize Kruger told Business Day that “notably higher GDP growth numbers are needed to make a dent in South Africa’s high unemployment rate and to address our socio-economic challenges”.
“Still, if all the challenges and uncertainties that have played out in 2025 are considered, it is clear that the economy has remained quite resilient,” she said.
One notable performer was gross fixed capital formation (GFCF), which rose by 1.6%. While the gain was modest, it followed three consecutive quarters of decline, marking the strongest quarterly performance for GFCF since 2024.
GFCF is the money spent by businesses and government on the long-term investments needed to grow the economy and create jobs, such as buildings, equipment and machinery.
Key drivers in the quarter included a surge in transport equipment, higher transfer costs, and gains in machinery and non-residential buildings such as schools.
According to acting statistician-general Joe de Beer, it also included government purchases of buses and trucks, imports of aircraft components, capital expenditure, computer software and cultivated biological assets (living animals and plants).
“There’s only one [subcategory] that came down, and that’s residential,” noted Bokang Vumbukani-Lepolesa, chief director of national accounts at Stats SA. It is too early to tell whether that increase can be viewed as sustained, she said.
“Though off a low base and still too low to push the potential growth rate higher, it is a positive development,” Kruger said.
The recovery leaves GFCF at about 14% of GDP, “which still requires it to rise closer to 20% of GDP if the growth target of 3% is to be realised in the medium term”, said North-West University Business School economist Raymond Parsons.
“In the coming year, a sufficient number of firms must therefore continue to feel that growth prospects justify their making fresh plans for expansion. The green shoots of the current economic recovery and investor confidence must still be nurtured by favourable policy responses.
“The challenge remains to implement robust growth-friendly policies that will further build on the steadier foundation of the incipient economic upturn that has become apparent in 2025.”
Still, the latest GFCF figure bodes well for unlocking the record R1.8-trillion in corporate cash reserves, as highlighted in the Reserve Bank’s September bulletin.
The build-up in business liquidity (up from R1.1-trillion in 2019) underscores the need to translate idle capital into productive investment, a challenge central to Ramaphosa’s structural reform agenda in energy, water and logistics, and key to reversing a decade of underinvestment and capital flight.
Electricity was the largest drag on third-quarter GDP, with the industry contracting by 2.5%, but that could indicate people are beginning to generate their own power.
Vumbukani-Lepolesa explained that while there may be no load-shedding, people could be improving energy efficiency or generating their own electricity, both of which could affect the electricity industry.
Indeed, there has been a notable increase in investment in renewable energy.
The National Energy Regulator of South Africa announced that during the first and second quarters of the current financial year it registered 111 and 181 companies, respectively, with renewable energy projects. Investment from these registrations alone totalled R82.69bn.
“This is in addition to the multitude of projects registered during the preceding two years,” remarked Stanlib chief economist Kevin Lings. “In fact, since the beginning of 2023, a total of 1,307 companies have registered renewable energy projects.”
The rand was unchanged following the release of the data and by 5.50pm was 0.2% weaker on the day at R17.12/$.
Update: December 2 2025
The article has been updated with further information and economists’ comments.
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