GDP grows - but not enough

The growth of 0.8% in the second quarter of this year has been the strongest since Q2 in 2023

- Aarti Bhana

South Africa’s second-quarter GDP growth came in stronger than expected, reaching its highest level in two years, but economists warned this is not enough to create new jobs and lift incomes.

The economy expanded by 0.8% in the second quarter of 2025, following a marginal increase of 0.1% in the previous quarter, Statistics South Africa said on Tuesday. This was the highest seasonally adjusted quarter-on-quarter rate of expansion since the second quarter of 2023, when GDP also increased by 0.8%.

Growth was supported by increases in eight of 10 key industries, with contributions coming from mining, manufacturing, trade and agriculture, while declines were reported in the transport and construction sectors.

The government cheered the number as a reflection of a broad-based recovery of the economy, saying in a statement: “The government views this as a positive sign of the impact of ongoing initiatives to stimulate growth, support local industries and create jobs.”

But economists say it will not translate into material positive changes for the average South African.

“The Q2 GDP rebound is a welcome signal that parts of the economy still have the capacity to surprise on the upside,” said Casey Sprake, an economist at Anchor Capital. “Nonetheless, for South Africans on the ground, the reality is that growth remains too low, too narrow and too fragile to meaningfully ease unemployment, reduce inequality or lift real household incomes.

“Without decisive reforms to unlock investment and rebuild confidence, the economy risks remaining stuck in a low-growth trap.”