SA’s economy expanded at the fastest pace in two years

South Africa’s economy expanded at the fastest pace in two years in the second quarter, boosted by manufacturing, mining, and trade.

Gross Domestic Product (GDP) grew 0.8% in the three months through June, compared with growth of 0.1% in the prior quarter. Economists polled by Reuters had predicted a smaller expansion of 0.5%. Second quarter GDP expanded 0.6% on a year-on-year basis, versus the economists’ forecast of 0.8%.

Eight of the 10 sectors recorded higher output, including mining and agriculture, though construction and transport contracted. The mining and quarrying industry increased by 3.7%, contributing 0.2% to GDP. The largest positive contributors were platinum group metals and chromium ore.

The manufacturing industry increased by 1.8%, contributing 0.2% to GDP growth. Seven of 10 manufacturing sub-sectors expanded in the quarter. The largest positive contributions were reported for the petroleum, chemical products, rubber and plastic products,

Despite strong stock market performance and a strengthening rand, business confidence is waning under the weight of US tariffs. South African exports, including vehicles and citrus fruits are subject to 30% tariffs, the steepest rates imposed by the US in sub-Saharan Africa. The momentum in growth will likely be dampened due to US tariffs.