South African Rand Steady After Q2 GDP Grows 0.8%

South Africa's economy showed signs of modest recovery in the second quarter of 2025, with GDP growth reported at 0.8%, surpassing economists' expectations of 0.5% and improving from the 0.1% growth in the first quarter. This acceleration, the fastest in two years, was driven by rebounds in mining and manufacturing sectors, supported by firmer global and domestic demand and better operating conditions. Despite these gains, the economy continues to face significant structural challenges, particularly logistics bottlenecks at ports and on the freight rail network, which constrain broader economic activity and export potential. The coalition government, formed last year, has pursued reforms to boost growth, but tangible results are yet to materialize, keeping investor sentiment cautious. The South African rand experienced minor fluctuations ahead of and after the GDP release, reflecting market uncertainty, while government bond yields remained elevated around 9.5%, signaling persistent risk concerns. Investor focus now shifts to upcoming data on mining, manufacturing, and the current account to assess whether growth momentum can be sustained.