Africa’s Richest Country on Track to Extend GDP Growth Streak for Third Quarter
Africa’s largest economy likely grew for a third consecutive quarter, driven by rebounds in manufacturing and mining, though new U.S. tariffs threaten to derail momentum.
Economists surveyed by Bloomberg between Aug. 8 and 13 forecast a 0.4% expansion in the second quarter, up from 0.1% in the previous three months.
Gains in mining were supported by demand-driven commodity price increases, according to Frank Blackmore, lead economist at KPMG South Africa.
The outlook darkened on Aug. 7 when U.S. President Donald Trump imposed fresh tariffs on several trading partners, including a 30% levy on South African exports, one of the steepest globally.
Already burdened with one of the world’s highest unemployment rates and sluggish growth, South Africa’s fragile economy now faces fresh strain from newly imposed tariffs.
The duties are expected to hit the automotive and agricultural sectors, potentially putting up to 30,000 jobs at risk, the trade department said.
That shock could stall growth in the second half of the year and further strain the labour market, warned Jee-A Van Der Linde, senior economist at Oxford Economics. The jobless rate climbed to 33.2% in the second quarter, the highest in a year.
Turning to China for a lifeline
In response, South Africa is moving to offset the impact of Washington’s 30% export tariffs by deepening trade ties with China. Under a new agreement, Beijing will initially import five varieties of South African stone fruit, a deal expected to unlock a lucrative entry into one of the world’s fastest-growing consumer markets.
Meanwhile, subdued inflation, hovering near the lower end of the central bank’s 3% to 6% target for nine consecutive months, has given policymakers room to cut interest rates by a cumulative 75 basis points to 7% in 2025. The easing has supported a 0.9% rise in retail sales for the quarter, with further reductions possible later this year.
