Business Leadership SA (Busa) CEO Busi Mavuso said that while economic growth in the third quarter of 2025 remained below the rate needed to make a dent in unemployment, the modest recovery was a step in the right direction.
The economy has shown resilience with growth of 0.5% in the third quarter, marking the fourth consecutive rise driven by mining, trade and agriculture. This was the economy’s longest period of sustained growth since the post-Covid recovery began in 2021.
In her newsletter on Monday, Mavuso said the GDP figures confirmed that South Africa was seeing “green shoots emerging in the economy”.
“The 2.1% year-on-year growth surprised economists and has triggered many to revise upward their forecasts for the full year from the previous consensus of around 1.2%. We should now beat that by a reasonable margin. Of course, this is still far below the meaningful growth we need to turn around unemployment, but it is a clear step in the right direction,” Mavuso said.
“Encouragingly, the numbers included a quarterly improvement in investment, the key to meaningfully expanding the economy. Within that was a modest improvement in public sector spending on investment, which has been particularly weak.
“That enabled the first overall increase in investment since mid-2023. To be clear, investment levels at 13.7% of GDP are still far too low, but it was positive to see the modest recovery.”
Mavuso noted that the GDP outcome added another positive sentiment driver, “coming after the improvements in fiscal performance reported in the medium-term budget policy statement, and the credit rating upgrade by S&P”.
“This is beginning to feed into business sentiment, and last week we saw business confidence climb five points in the RMB BER [Bureau for Economic Research] survey for the fourth quarter, turning around two consecutive declines. The improvement in confidence was broad-based across sectors, which is particularly encouraging,” she said.
Despite the momentum, credit ratings agency Moody’s announced in a periodic review on Friday that it would take no ratings action and would keep maintaining its cautious stance on South Africa’s growth trajectory.
Without any ratings action Moody’s said in a periodic review...it was keeping its rating unchanged, maintaining its cautious stance on South Africa’s growth trajectory.
“The market, however, is voting with its wallet and showing greater confidence in South Africa’s trajectory. I must congratulate National Treasury for last week’s placement of $3.5bn in bonds on international capital markets, which was 3.7 times oversubscribed by investors,” Mavuso said.
“That provides Treasury with good funding headroom at lower borrowing costs than it had historically achieved. Its 12-year bond was priced at a yield of 6.25%, compared to the 7.1% it raised a year ago. This strong global support for the government is exactly what we gain from the good fiscal management [the] government has delivered.”
Mavuso said the market was ready to back the South African economy, “as the bond placement shows”. “With growing confidence, investment levels are starting to respond. If we stay the course, the future is bright.”
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