No consensus on South Africa’s Q4 GDP forecast
· The South African
There is no consensus on what to expect in the fourth quarter 2025 gross domestic product (GDP) due on 10 March from Statistics South Africa.
The range of forecasts is from 0.1% quarter-on-quarter to 0.6% quarter-on-quarter with several economists opting for a 0.3% quarter-on-quarter forecast. The latter would be an easing from the third quarter’s 0.5% quarter-on-quarter increase.
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The Bureau for Economic Research (BER)
The BER forecast quarterly growth of 0.3%, although it warned that the latest high-frequency indicators point to meaningful downside risks, with activity currently tracking closer to flat on the quarter.
It noted that large parts of the services sector are not well captured by high-frequency data, while the relatively small agricultural sector has had an outsized influence on quarterly GDP prints in recent quarters.
In addition, potential revisions to the third quarter data add another layer of uncertainty. Even so, full-year growth of 1.3% for 2025 still appears attainable.
Third quarter GDP detail
Accordingly, the services sector accounts for a massive 70% of total GDP in the third quarter 2025. The single largest category is the financial services sector at 23%, closely followed by the personal services sector at 16%.
Statistics South Africa said that wholesale trade, retail trade, motor trade, accommodation and food & beverages were stronger in the third quarter. Additionally, air transport, transport support services and communication services registered increases, while increased economic activities were reported for real estate activities and other business services.
Furthermore, there was a rise in employment in the civil service, which boosted government services. The increase in personal services was driven by community services and other producers.
The secondary sector contracted by 0.1% quarter-on-quarter in the third quarter. Manufacturing expanded by 0.3% with only four of the ten manufacturing divisions managing to grow. The electricity, gas & water category saw a 2.5% decline due to decreases in electricity production and consumption. Construction managed a 0.1% rise with increases reported for non-residential buildings and construction works.
The primary sector grew by 1.8% with agriculture up 1.1% and mining production jumping by 2.3%. Agriculture saw increased economic activity in field crops, horticulture and animal products.
SA Services data sourced from Statistics South AfricaEfficient Group
Efficient Group chief economist Dawie Roodt was bearish. His forecast was for fourth quarter growth of only 0.1% quarter-on-quarter and 1.1% for the full year.
Nedbank Economic Unit
The Nedbank Economic Unit was more optimistic and forecast quarterly growth of 0.6% and annual growth of 1.4%. The latter is also the National Treasury’s forecast for 2025.
Nedbank said high-frequency data suggest services provided the momentum, driven by robust activity in domestic trade and finance. Elsewhere, performances were mixed. Agriculture probably ended the year on higher ground, while mining, manufacturing and electricity remained under pressure.