Economic growth improves in Q2-2025

SOUTH AFRICA - Report 09 Sep 2025 by Iraj Abedian

South Africa’s quarter-on-quarter real GDP expanded by 0.8% during the second quarter of 2025 following the first quarter’s 0.1% q/q increase. On account of the generally weak quarterly growth rates, real GDP in the first half of the year was only 0.7% higher than that of the corresponding period in 2024. The uncertainty around tariffs was already weighing on the economy in the second quarter, but the full impact only materialized in the third quarter, when the 30% “reciprocal tariff” on South African exports to the US took effect (in August). During Q2, only the initial 10% tariff had been in place. At the same time, and as we have previously highlighted, there has been a vast improvement in electricity supply that has led to almost no load-shedding, benefiting, most especially, the country’s electricity-intensive sectors. In addition, logistics have shown notable improvement on the back of improved efficiency at Transnet, easing one of the key bottlenecks that had been placing significant strain on South Africa’s economy.

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