The resilience in economic activity, evident in the PayInc data, serves as a reminder of the complexity of the South African economy an economist says.
Economic activity was stronger in September for the fifth month, although risks remain. While several positive factors are helping to sustain demand, the low growth rate indicates the economy is operating mostly in survival mode.
According to the PayInc Economic Index (formerly BankservAfrica), which tracks electronic transactions PayInc processes, the index continued its upward trend since April, reaching a revised level of 102.3 in September 2025. This is 0.2% up on August’s level and 3% higher than a year ago, Shergeran Naidoo, head of stakeholder engagements at PayInc, says.
Elize Kruger, an independent economist, says no single factor is the primary driver of the outcome. “The outcome is rather the net effect of multiple forces with tailwinds and positive developments countering the potential negative impact of headwinds and challenges, such as the uncertain global environment.”
She points out that positive forces in the economy include low inflation, recent interest rate cuts, real increase in salaries for the second consecutive year and lower fuel costs. “These are in addition to the diversified trade composition, higher commodity prices, and a stable and stronger rand exchange rate.
“These factors, cumulatively, support base demand in the economy, despite low confidence levels, uncertainties and high cost of living challenges,” Kruger says.
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Economic activity not that great with low GDP
With the historical positive correlation between the PayInc Economic Index and real gross domestic product (GDP) growth on a quarterly basis at 97.1%, Kruger says the index signals a growth rate of around 1.1% for the third quarter of the year.
However, she cautions that South Africa remains on the backfoot, with the real GDP growth forecast at only around 1.0-1.2% for 2025.
“Given that our population increase is bigger than this growth rate, South Africans are on average becoming poorer, while such a low growth rate is unlikely to stimulate any significant job creation. This remains concerning given that one out of three willing people in South Africa are already unable to find employment.”
She says other timeous economic indicators confirmed the PayInc Economic Index’s movements. The Automotive Business Council, Naamsa, revealed that the vehicle sales market maintained its robust performance in September 2025, with total vehicle sales improving by 24.3% in September and year-to-date sales up by 15.6% compared to a year earlier.
New car sales in September grew by a notable 28.0% and year-to-date were 22.1% ahead. The S&P Global South Africa Purchasing Managers’ Index (PMI®) – a composite gauge designed to give a single-figure snapshot of operating conditions in the private sector economy – remained in expansionary territory with an index level of 50.2 in September, marginally up from the 50.1 in August.
“The index signalled a mild improvement in the health of the private sector economy, marking the fifth consecutive month of recorded growth.”
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New car sales also brings hope for economic activity
Kruger also pointed out that the seasonally adjusted Absa PMI increased to 52.2 in September and returned to expansionary territory for the second time in 2025. “Encouragingly, the average PMI for the third quarter increased to 50.8 points, showing an increase from the previous quarters. The report noted that the industry continues to face challenges, as export demand remains sluggish while it is further complicated by US trade tariffs.”
Kruger says the number of transactions cleared through PayInc reached an all-time high of 181.1 million, surpassing the previous record of 177.8 million in August 2025 and up by 15.5% on a year ago.
Volume increases were recorded in all payment streams except Real Time Clearing. The nominal value of electronic transactions also increased to R1.378 trillion in September compared to R1.351 trillion in August 2025.
“Despite the underlying resilience evident in the economy, the narrative is one of surviving rather than thriving,” says Kruger. “With the economic growth rate still stuck at around 1%, the business environment remains challenging as seen in the number of job losses announced in recent weeks, in different sectors of the economy.
“This reflects the underlying strain, especially in sectors that are directly affected by factors such as the impact of US import tariffs and could place downward pressure on economic activity in the final months of 2025.”
