Mining and Manufacturing Boost South Africa’s GDP to 0.8% in Q2 2025

South Africa’s economy recorded a 0.8% growth in the second quarter of 2025, marking the strongest quarterly growth since the second quarter of 2023. This is a significant increase from the first quarter’s modest 0.1% growth.

Mining and Manufacturing Lead the Growth

The growth was largely driven by the mining and manufacturing sectors, which have played a pivotal role in keeping the South African economy afloat. On the production side, eight out of ten industries showed growth, with trade, agriculture, forestry, and fishing also contributing positively. Agriculture experienced a 2.5% increase, primarily due to stronger activity in horticulture and animal products.

READ: READ: US Tariffs Threaten Thousands of SA Jobs, Minister Tau Races to Secure a Deal

Expenditure and Investment Trends

Household consumption strengthened during the quarter, while imports softened, contributing to positive momentum on the expenditure side. However, gross fixed capital formation declined by 1.4% for the third consecutive quarter, and net exports had a negative impact on overall GDP, with exports and imports dropping by 3.1% and 2.1% respectively. Experts note that while short-term recoveries are possible, lasting growth will require addressing structural barriers and unlocking investment.

Inflation Outlook

Despite the GDP increase, the growth rate is not considered strong enough to raise concerns about inflation. Analysts suggest that the South African Reserve Bank may have room to consider interest rate cuts in the coming months, with a potential 25 basis points reduction anticipated later this year.

Looking Ahead

Economists caution that while the GDP growth provides cautious optimism, it remains below the 3% needed to significantly impact job creation. For sustained economic recovery, structural reforms and investments in infrastructure will be crucial.

READ: Minister Patricia de Lille Launches G20 Tourism Investment Summit with R1 Billion Projects

South Africa’s economy shows promise, but experts emphasize that unlocking investment, supporting key sectors, and balancing inflation concerns will be critical to achieving long-term growth.