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Another Big Win for South Africa — Key Points

03 Dec 2025
Author: Neil Helps

Another Big Win for South Africa — Key Points

South Africa recorded another positive economic surprise as real GDP grew by 0.5% in Q3 2025, marking the fourth consecutive quarter of growth and aligning with expectations.

Stronger-Than-Expected Momentum

Q2 GDP was revised up from 0.8% to 0.9%, strengthening South Africa’s growth trajectory.
Despite fears that the US’s 30% reciprocal tariffs (effective August) would weigh heavily on local industries, the impact was milder than predicted.

Main Drivers of Growth

Nine out of ten industries expanded in Q3, with the standout performers being:

1. Mining — the biggest contributor

Output up 2.3%, driven by:
- Platinum group metals (strongest driver)
- Manganese ore, coal, chromium ore, copper
Declines in iron ore, diamonds, nickel and gold did not offset overall gains.

2. Agriculture

Grew 1.1%, its fourth straight quarterly increase.
Boosted by strong production of field crops, horticulture and livestock.

3. Trade, Catering & Accommodation

Also saw its fourth consecutive quarter of growth.
Growth came from wholesale, retail, motor trade, accommodation, and food services.

4. Government Services

Growth driven by higher employment in national/provincial departments and extra-budgetary institutions.

5. Transport, Storage & Communication

Up 0.5%, lifted by improvements in air transport, communications, and support services.

6. Construction

Finally turned positive — up 0.1% — after three quarters of contraction.

The only sector that shrank was electricity, gas & water, down 2.5% due to weak electricity production and lower water usage.

Demand Strength Also Improving

Growth on the expenditure side came from:

Household Consumption (+0.7%)

Sixth quarter of growth.
Biggest driver: transport, thanks to stronger new vehicle sales.
Clothing & footwear and miscellaneous goods declined.

Gross Fixed Capital Formation (+1.6%)

First increase after three quarters of decline.
Boosted by:
- Higher investment in transport equipment
- Stronger spending on ICT equipment and software

Exports (+0.7%)

Uplift came from vegetable and mineral products, despite US tariffs.

Imports (+2.2%)

Driven by machinery, electrical equipment, mineral products, textiles, and fats/oils.

2025 Growth Outlook

While sentiment improved and forecasts were revised upwards (1%–1.2%), actual year-to-date growth averages 0.5%:

Q1: 0.1%
Q2: 0.9%
Q3: 0.5%

Even with a strong Q4, South Africa is likely to end 2025 below 1% growth, according to KPMG’s Frank Blackmore.

South Africa needs at least 3% GDP growth to meaningfully reduce unemployment and accelerate economic recovery.

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