South Africa’s economic growth rate quickened in the second quarter of 2025, reaching its fastest in two years, though it remains well below the level needed to meaningfully reduce high levels of poverty and inequality.

Statistics South Africa recorded growth of 0.8% in quarter-on-quarter terms, better than economists’ predictions for an expansion of 0.5%.

There was a broad-based improvement from the first quarter, when growth of 0.1% was recorded, as eight of the 10 sectors tracked by the statistics agency registered higher output, including mining and agriculture. Household consumption picked up, helped by interest rate cuts by the country’s central bank.

But analysts said a continued contraction in gross fixed capital formation was worrying, adding much higher investment was needed for the growth rate to be sustainably stronger.

GDP growth has averaged less than 1% annually over the past decade, below the rate at which the population has expanded.

“Economic growth was a little bit better than we expected … though this doesn’t quite eliminate all of the concerns around trend growth,” said Elna Moolman, Standard Bank’s head of South Africa macroeconomic research.

The coalition government formed last year has been trying to boost growth through reforms, though its efforts are yet to bear fruit.

Trump tariffs

Longstanding domestic issues such as logistics bottlenecks at the ports and on the freight rail network are only slowly easing, and the global economic backdrop has worsened because of US President Donald Trump’s trade policies.

Last month, Trump imposed a 30% tariff on goods from South Africa, the highest rate in sub-Saharan Africa, which is expected to affect the economy’s performance from the third quarter onwards.