South African consumers are spending more, but can the economy keep up?

With average pay rises above 5%, 2025 looks set to deliver a second year of real salary gains — and consumers are already responding.

Transactions cleared through PayInc, formerly BankServ, hit a record in August, rising 9.4% year-on-year and led by Real-Time Clearing, DebiCheck, and PayShap. By value, electronic transactions eased to R1.351 trillion from R1.405 trillion in July.

Cash demand stayed firm too, climbing 4.4% month-on-month in real terms, 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,” said Shergeran Naidoo, Head of Stakeholder Engagements at PayInc.

That momentum in household spending and payments is clear – but it’s unfolding against an economy that has yet to regain meaningful traction.

The PayInc Economic Index for August 2025 posted a fourth straight month of gains, signalling resilience amid persistent headwinds.

“The index level reached 102.8 in August 2025, a growth of 1.3% on July’s level,” said Naidoo. Year-on-year, the index is 3.7% higher.

The better-than-expected GDP outcome of 0.8% quarter-on-quarter growth in the second quarter confirms the trend.

“The improvement, as reflected in the PayInc Economic Index over the past few months, is surprising given the domestic and global challenges this year,” said Elize Kruger, Independent Economist.

Those challenges include higher import tariffs, inefficient rail and port infrastructure, pressure on key trading partners, and cheaper imports squeezing local firms.

Based on Statistics South Africa’s latest data, economists now expect full-year growth of between 0.9% and 1.2%.

That’s well below National Treasury’s forecast of 1.4% and far from the 3% target set by Operation Vulindlela.

“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,” said Kruger.

PayInc noted that while the economy may be treading water, retail is holding up strongly, with real sales rising by 3.8% in the first half of 2025, outpacing broader growth.

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