The South African economy expanded by 0.8% in quarter two of 2025, slightly exceeding the expectations of pundits. The key industries driving the growth were manufacturing and mining. 

According to Statistics South Africa (Stats SA), consumer activity was upbeat in quarter two and also drove growth from the expenditure/demand side. Quarter one saw a marginal 0.1% increase in economic growth, raising alarm.

Mining and manufacturing

The positive turn in the mining and manufacturing industries follows two consecutive quarters of decline. The Stats SA overview indicated “manufacturing production expanded by 1.8%, driven mainly by the automotive and petroleum, chemicals, rubber & plastics divisions. 

Mining output grew by 3.7%, the fastest pace since the first quarter of 2021 (4.4%). Platinum group metals, gold, and chromium ore were the main positive contributors”.

Agriculture continues gaining momentum

Agriculture recorded a third consecutive increase, expanding by 2.5%, following a revised 18.6% rise in the first quarter. This is thanks to increased activity in the horticulture and animal products space. 

FNB Senior Agricultural Economist Paul Makube said good horticulture harvests on the back of favourable production conditions increased product availability for both the domestic and export markets.

#SAeconomy || ??Today, @SGMaluleke, unpacked the details behind the gross domestic product numbers.

The economy expands by 0,8% in the second quarter of 2025.

Read more here: https://t.co/8D6NYJnf6J#StatsSA #KnowYourStatsZA #GovZAUpdates pic.twitter.com/J3LfZE5P38

— Statistics South Africa (Stats SA) (@StatsSA) September 9, 2025

Concerns around trend growth

Dr Elna Moolman, Standard Bank Group Head of South Africa Macroeconomic Research, said whilst the latest data reduces the downside risk to the 2025 economic growth forecast, it doesn’t quite eliminate concerns around trend growth and the speed with which trend growth will improve. 

She said in the first quarter, several factors weighed down on many industries, and the second quarter recovery should be seen as a reversal of those specific headwinds. 

South Africa's GDP Grew at the Fastest Pace in 2 years

SA GDP grew 0.8% in Q2 '25, up from 0.1% in Q1 '25 due to strong performance in both mining and manufactruing.

— Alex Frey (@alex7frey) September 9, 2025

Fixed investment needs improvement

Speaking of trend growth, Dr Moolman said fixed investment needs to improve dramatically for there to be sustainable economic growth. “A key factor in this data set is fixed investment, which unfortunately registered another quarter-on-quarter contraction. 

“However, the private sector’s fixed investment at least increased and therefore partly reversed the contraction from the first quarter. But it was still lower than a year earlier.”

This echoes the post-budget analysis by Dr Arno van Niekerk, economist and lecturer at the University of the Free State (UFS), back in May 2025, that South Africa is in survival mode, and more needs to be done to stimulate economic growth. 

“We need GDP growth of about 2% at a minimum to take the country forward,” said the author of The Inclusive Economy: Criteria, Principles and Ubuntu at the time. Revenue and economic growth forecasts have been revised downwards, a signal that the country is in financial distress. 

ALSO READ: ‘South Africa is in survival mode’ – Dr Arno van Niekerk on Budget 3.0

OFM Business Hour mvh