The latest gross domestic product (GDP) figures released by StatsSA on 9 September are much better news on the growth front than we have received for some time.

Prof Raymond Parsons, economist from the North-West University (NWU) Business School, says that, as was broadly expected, the GDP figures for the second quarter of 2025 confirm that the incipient economic recovery has accelerated and widened by involving several more sectors in supporting economic growth.

He says both household and government spending were positive in the period under review and were the main drivers of an improved GDP performance.

According to him, the challenge now is getting the economy up to the growth target of the Government of National Unity (GNU) of 3% in the medium term.

“GDP growth is still expected to be only about 1% for 2025 as a whole and this is not good enough for South Africa’s urgent socioeconomic needs. As high-frequency data in the third quarter of 2025 still seems mixed, potential vulnerabilities remain in the present economic outlook.”

Prof Parsons explains that one worrying factor is that exports already showed a negative trend in the second quarter of 2025, at a time of pending further global uncertainty.

Another weak link in the economic scenario is the continued negative performance of fixed capital formation, which is the kingpin of sustained economic growth.

“South Africa therefore now needs to build on – and expand – the incipient economic recovery. New global headwinds, as well as continued domestic policy challenges, require economic reforms to go further and faster and boost investor confidence. This will help to strengthen economic resilience and maximise investment and growth,” he concludes.