August 2025 showed a fourth month of consecutive economic gains, a clear sign of economic resilience amid persistent headwinds.
This is the headline finding from the PayInc Economic Index, launched today by PayInc, formerly BankservAfrica. With a refreshed methodology, the monthly index delivers deeper insights into South Africa’s economic activity by capturing both electronic transactions processed by PayInc and cash demand.
“The index level reached 102.8 in August 2025, a growth of 1.3% on July’s level,” says Shergeran Naidoo, head of stakeholder engagements at PayInc.
Year-on-year, the index is 3,7% higher, indicating that the Q2 uptick has carried into Q3 despite uncertainty and weak confidence. The better-than-expected GDP outcome for Q2 at 0,8% q/q also confirms this narrative of resilience, in-line with indications from the PayInc Economic Index.
“The improvement, as reflected in the PayInc Economic Index over the past few months, is surprising given the domestic and global challenges this year,” says independent economist Elize Kruger.
Higher import tariffs, inefficient rail and port infrastructure, pressure on key trading partners, and cheaper imports squeezing local firms have created a highly challenging operating environment. This is reflected in subdued sentiment with the RMB/BER Business Confidence Index falling to 39 in Q3, below its long-term average of 42, indicating that just over 60% of firms are dissatisfied with current conditions.
While the economy may be treading water, retail remains strong with real sales rising by 3,8% in the first half of 2025, beating the broader economy.
According to Kruger, several local tailwinds are supporting the economy with inflation set to average at 3.4% in 2025, compared to 4.4% in 2024, giving the South African Reserve Bank scope to cut interest rates by 75 bps year-to-date in 2025, easing pressure on households and firms. With average pay rises above 5%, 2025 should deliver a second year of real salary gains, supporting consumer spend.
In line with PayInc Economic Index’s August uptick, other timely indicators point to firming momentum. Naamsa revealed strong performance with total vehicle sales rising by 18,7% year-on-year in August, with year-to-date sales up by 14,5% compared to a year earlier, while new car sales grew by 22,5% year-on-year and 21,3% ahead on an annual basis.
he S&P Global South Africa Purchasing Managers’ Index held just above expansion at 50.1 in July, while the seasonally adjusted Absa Purchasing Managers’ Index slipped to 49.5, underscoring ongoing pressure in manufacturing.
Record high for electronic payments
Transactions cleared through PayInc hit a record 177,8-million in August – slightly above July’s 177,5-million and up 9,4% year-on-year, according to Naidoo.
Growth was led by Real-Time Clearing, DebiCheck, and PayShap. By value, electronic transactions eased to R1,351-trillion from R1,405-trillion in July.
Meanwhile, cash demand stayed firm, rising 4,4% month-on-month in real terms, according to PayInc’s Integrated Cash Management System (ICMS) data, underscoring cash’s enduring role in South Africa’s economy.
“Momentum is positive for digital payments, which continues to reflect monthly growth. However, we’re well-aware that inclusion requires meeting consumers where they are by bridging cash to digital, and making daily digital payments the simplest, trusted choice,” says Naidoo.
Overall, while some sectors continue to perform well, the economy remains subdued and the outlook for the remainder of 2025 is uncertain. Broad-based job cuts reflect the underlying strain and will likely place downward pressure on the economic activity in the final months of 2025.
“Even with the real GDP growth for 2025 stabilising at 1% in 2025 from 0.6% in 2024, the economy is still lagging behind population growth, leading to living standards stagnating for South Africans,” Kruger says.