South Africa’s economy continued to expand in the third quarter of 2025, but at a slower pace — matching analysts’ expectations, new data from Statistics South Africa (SSA) showed on Tuesday.
Real gross domestic product (GDP) grew by 0.5% in the three months ending September, down from a revised 0.9% increase in Q2, marking the first deceleration in 12 months.
The slowdown follows a contraction of 0.1% in Q3 2024, when the economy struggled to recover from previous shocks.
Despite the moderation, the quarterly rise marks the fourth consecutive quarter of growth, the longest streak since 2021 when South Africa was emerging from the economic fallout of Covid-19.
On a year-on-year basis, GDP increased by 2.1%, above economists’ forecast of 1.8%, reflecting stronger-than-expected performance in key sectors.
Mining leads sector growth
On the production side, nine of the ten industries recorded growth in Q3. Mining and quarrying remained the standout performer, expanding by 2.3%, supported by platinum group metals, manganese ore, coal, chromium ore, and copper. Output in iron ore, diamonds, nickel, and gold fell slightly but did not materially affect overall sector performance.
Agriculture, forestry, and fishing continued its upward momentum, registering a 1.1% increase, driven by stronger production of field crops, horticulture, and animal products.
Trade, catering, and accommodation also posted their fourth consecutive quarter of growth.
“Positive gains were recorded across the board, with stronger wholesale trade, retail trade, motor trade, accommodation and food & beverages,” SSA’s latest GDP report read.
Meanwhile, other sectors presented a mixed picture.
Construction turned positive for the first time in four quarters, rising 0.1%, while electricity, gas, and water contracted by 2.5% due to weaker production and consumption.
Transport, storage, and communication contributed positively, buoyed by growth in air transport and related services. General government activity rose, supported by increased employment across national and provincial institutions.
Consumption rises for sixth straight quarter
On the expenditure side, household consumption rose for a sixth consecutive quarter, up 0.7%, with transport spending, particularly new vehicle sales, as the largest contributor.
Gross fixed capital formation recovered by 1.6%, driven by investments in transport equipment and ICT assets. Exports rose 0.7%, mainly in vegetable and mineral products, while imports increased 2.2%, reflecting machinery, mineral, textile, and fats and oils trade.
Labour market recovers
The slowdown in GDP growth comes against the background of a stabilising labour market, with unemployment falling for the first time in a year during the same quarter.
The improvement challenges fears that US President Donald Trump’s 30% tariff would trigger widespread job losses in Africa’s most industrialised economy.
The jobless rate eased to 31.9% in the three months to September, down from 33.2% in Q2 — the lowest level since Q4 2024.
Officials credited the gains to stronger activity in construction, social services, and trade.
