SA economy surprises with modest Q2 growth, but outlook for remainder of 2025 uncertain

The Money Show's Stephen Grootes looks at the latest GDP numbers with Sifiso Mkwanazi, economist at Alexforbes.

South Africa's economy grew slightly in the second quarter, but further growth in 2025 is uncertain.

Statistics South Africa's latest numbers.show that real gross domestic product or GDP strengthened by 0,8% in Q2 (April–June).

This follows on marginal growth of 0,1% in the first quarter.

Manufacturing, mining and trade led growth on the production (supply) side of the economy. 

The expenditure (demand) side was also positive, says Stats SA, lifted mainly by stronger household consumption and softer imports.

Stephen Grootes takes a closer look at the numbers with Sifiso Mkhwanazi, economist at Alexforbes.

While mining is one sector that showed recovery from a decline in the previous quarter, this was a partial recovery, Mkhwanazi points out.

On the spending side, he also strikes a note of caution about support for increased consumer spending continuing.

"You had the consumer remaining quite resilient, with household spending growing by around 0.3% quarter-on-quarter. However, we are concerned that the sectors that have been driving or supporting household spending within the second half of this year are going to start unwinding."

Sifiso Mkhwanazi, Economist - Alexforbes

It all basically comes down to the inflation rate and the effect on interest rates.

"We are already seeing inflation picking up, and we're of the view that the SARB is done with the cutting cycle... so the support that the household enjoyed from relatively low interest rates is also fading away."

Sifiso Mkhwanazi, Economist - Alexforbes

Also worrying, Mkhwanazi adds, is the fact that capital formation or fixed investment has been in a slump for three consecutive quarters. Along with that, the latest RMB/BER business confidence index that shows the sentiment deteriorated in the third quarter.

ALSO READ: Business confidence in SA drops further in 3rd quarter of 2025 - Index

For more detail, listen to the interview audio at the top of the article