South Africa’s economy grew 0.8% in Q2 2025, but structural barriers continue to stall meaningful, long-term growth.
South Africa’s economy expanded 0.8% in Q2 2025, improving from 0.1% in Q1, according to official data. Annual growth is still forecast at just 1.2%, well below the 3% needed to generate a million jobs.
Growth was driven by mining, manufacturing, electricity, and consumer spending, translating into 2.8% annualized growth, said Old Mutual economist Johann Els. But he cautioned: “It still reflects weak underlying growth.”
Deputy Trade and Industry Minister Zuko Godlimpi said boosting SMMEs is crucial, stressing: “This is not merely about economic growth in numeric terms; it is rather about a structural shift in our economy.”
Structural barriers—energy insecurity, outdated infrastructure, and market concentration—remain major drags. Since 1994, industry’s share of output has plunged from 23.5% to 13%, while unemployment stands at 33%. Rising electricity costs and failing transport networks also sap competitiveness.
Analysts warn that without accelerated reforms, growth could stay stuck near 1%, far short of reducing poverty and unemployment.
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