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This report covers the key domestic and international data releases over the past week. The more comprehensive BER Weekly Review (Enhanced Version) includes a detailed discussion on the main economic events and developments over the past week, a summary of upcoming data (the week ahead), and the BER’s forecast for key economic indicators. The full Weekly is only available to BER Essential Insights subscribers (sign up here – it’s only R210/month and you get more benefits) and BER Premium Insights clients.
The National Treasury’s successful issuance of R11.8bn under SA’s first Infrastructure and Development Finance Bond indicates a shift toward diversified and sustainable infrastructure financing. The bond will support projects under the Government’s Budget Facility for Infrastructure (BFI). The BFI is a mechanism within the budget process that supports the execution of national priority infrastructure.
From a fiscal policy perspective, the introduction of dedicated infrastructure bonds represents a careful balance between broadening the state’s financing toolkit and managing long-term debt sustainability. On the one hand, infrastructure bonds offer clear advantages: they create transparent, ring-fenced funding for priority capital projects, help crowd in private investment, deepen the domestic capital market, and support long-term economic growth by improving the quality and scale of public infrastructure. Their structure can also enhance investor confidence, as the use of proceeds is linked to economically productive assets rather than operating expenditure.
On the other hand, these instruments also carry inherent trade-offs. They still contribute to overall sovereign debt levels, potentially adding pressure to fiscal metrics and borrowing costs if not matched by strong project execution. Infrastructure bonds may also fragment the sovereign curve if issued too frequently or in too many tenors, and they require robust project governance to prevent misallocation of capital. In this way, while infrastructure bonds are a powerful mechanism for mobilising development-oriented financing, their success depends on maintaining fiscal discipline, ensuring credible project pipelines, and integrating them into a coherent medium-term borrowing strategy.
The RI2036 is priced at 8.575%, while the 10-year benchmark government bond was trading around 8.51%. The difference here is roughly a +6.5 basis-point yield premium on the infrastructure bond versus the benchmark, indicating very tight spreads, given that this was a new issuance with a targeted infrastructure purpose.
The RI2041 infrastructure bond is priced at 9.13%. There is no direct daily market fix for 15-yr SAGBs publicly available in the same way as the 10-yr. Still, historical capital market statistics show that longer maturities have generally been priced slightly above 10-yr yields (e.g., ~9.1–9.4%) under current market conditions. On that basis, the RI2041 appears to have been issued at or slightly below prevailing long-term SAGB yields, reflecting equally tight spread conditions for the 15-year tenor.
This week, the Minister of Electricity officially approved Eskom’s updated unbundling strategy, a significant milestone in SA’s electricity reform process. Under this strategy, Eskom will be restructured under a holding company with several subsidiaries, including the National Transmission Company SA (NTCSA), generation and distribution companies, and others. Crucially, the Transmission System Operator (TSO) is to be spun out as a completely independent state-owned company, separate from the Eskom Group. At the same time, NTCSA will continue to own, expand and maintain the transmission grid as a subsidiary of Eskom Holdings.
This model is aligned with the Electricity Regulation Amendment Act (ERAA), which mandates the creation of a fully independent TSO within five years, but stops short of spinning NTCSA itself out from Eskom at this time.
One of the key elements of SA’s reform agenda is the Independent Transmission Programme (ITP), which was endorsed by Cabinet to accelerate the expansion of transmission infrastructure by attracting private investment. The ITP aims to deliver new transmission lines and capacity under a structured procurement programme that allows private developers and financiers to participate under predictable regulatory rules and cost-recovery mechanisms. This programme is seen as vital to help meet the Transmission Development Plan’s targets and integrate renewable generation.
The impact of NTCSA’s current structural position on its ability to raise funding for ITPs is significant. Because NTCSA remains a subsidiary of Eskom rather than a fully independent entity, it does not yet have the standalone balance sheet strength and credit profile that often supports easier access to capital markets or private financing. Investors and lenders typically look for clear legal separation, strong governance, and independent financials when evaluating project finance opportunities, and the current structure may make it harder for NTCSA to secure long-term, non-sovereign financing on favourable terms, and harder to obtain a guarantee from the new World Bank Credit Guarantee Vehicle. This could, in turn, affect how quickly and cheaply capital can be mobilised for large transmission infrastructure deliveries under the ITP programme.
This is not only the last Weekly Review of 2025, but also the final Weekly that Jenny Tucker will read in her official editing capacity. Jenny has played a vital role in the Weekly since its launch in 2013 and, by my estimate, has read close to 600 issues over the years. Late nights, early mornings, and always thoughtful feedback: thank you, Jenny, for everything you have given to the Weekly. We wish you a joyful and well-deserved full retirement.
To our readers: happy holidays! We look forward to catching up again in the new year – the first Weekly of the year will go out on 9 January 2026. We will be including the insights of the BER’s first in-house political analyst, Natasha Marrian, in the Weekly from next year.
The FNB/BER Consumer Confidence Index (CCI) rebounded to -9 index points in the fourth quarter, after slipping from -10 to -13 in the third quarter of 2025. While the fourth quarter reading of -9 is slightly lower compared to the 2024 festive season reading of -6, it is the highest consumer confidence reading in 2025. This suggests another holiday season of solid retail sector activity and healthy consumer spending. The most notable improvement across the three CCI sub-indices was the sub-index measuring the appropriateness of the present time to buy durable goods, which rose to its highest level in more than six years (supported by a relatively lower interest rate environment compared to 2024Q4). In all, the uptick in consumer sentiment shows a slight improvement in willingness to spend, particularly among middle-income households, relative to the third quarter of 2025. Read more about the details here.
Internal trade data from Stats SA indicated that real retail trade sales rose by an above-consensus 2.9% y-o-y in October, from a downwardly revised 3% increase in September. Retailers of textiles, clothing and footwear led the expansion (up 5.8% y-o-y) adding one percentage point (%pt) to the headline. Noticeable sales growth was also observed among all ‘other’ retailers (this category encompasses e-commerce retail sales) and retailers of furniture and hardware. On a seasonally adjusted basis (sa), sales rebounded by 0.9% m-o-m, following a second monthly contraction of 0.1% m-o-m in September.
On an annual basis, real motor trade sales registered six consecutive months of expansion, increasing by 2.0% y-o-y in October, following an upwardly revised 9.1% y-o-y rise in September. However, unlike prior months, growth was significantly more concentrated, with new vehicle sales being the only positive contributor to the annual figure (up 13.3% y-o-y; +3.4 % points), while the five other motor trade categories declined. The biggest drags were fuel sales and workshop income. On a positive note, real motor trade sales (sa) increased by 0.7% in October, up from a 1% decline in September.
Lastly, the wholesale sector fared poorly in comparison to retail and motor trade. Real wholesale trade sales fell by 3.4% y-o-y in October, reversing a 1.4% y-o-y gain in the previous month. However, compared to September (-1% m-o-m), real trade sales (sa) shrunk slightly less, declining by 0.2% m-o-m in October.
According to Stats SA, manufacturing production rose by a modest 0.2% y-o-y in October, following an upwardly revised 1% y-o-y expansion in September. Still, this outpaced consensus expectations of a 1.7% contraction. Eight of the ten main subsectors saw growth, with the most significant positive contributions coming from food and beverages (+1.9%; +0.5%pts) and electrical machinery (+6.5%; +0.2%pts). Meanwhile, the biggest drag came from wood and paper products (-6.9%; -0.7%pts). On a monthly basis (sa), output increased by 1% in October, up from a 0.3% rise in the prior month. Indeed, a slight retreat in the Absa PMI for October, after a strong September reading which came in just above the 50-neutral point, foreshadowed more modest factory activity for the month.
Even better news was that mining output surged by 5.8% y-o-y in October, up from an upwardly revised 1.4% y-o-y increase in September. The biggest positive contributors were iron ore (+24.8%; +2.9%pts), PGMs (+3.9%; 1.1%pts), manganese ore (+15.1%; +1%pt) and chromium ore (+14.1%; +0.8%pts). Positively, production rose by 2.1% m-o-m (sa) in October, following a 2.6% m-o-m rise in the prior month.
The Fed lowered the interest rate by 25bps to 3.5%-3.75%, in line with the latest market expectations – although for some time it was a coin toss to see where the vote would go. This move brings interest rates to their lowest level since 2022. The decision was split, with three members dissenting, which was an unusual occurrence not seen since September 2019. One of the committee members supported a larger 50bps cut, while two other members preferred to keep rates unchanged.
Meanwhile, policymakers’ forecast for the Fed fund rates remained unchanged for September, indicating just one further 25bps cut in 2026. Regarding GDP, the Fed increased its growth projections for 2025 (1.7% vs 1.6%) and 2026 (2.3% vs 1.8%). PCE forecasts (the Fed’s preferred measure of price changes) were revised slightly lower for 2025 (2.9% vs 3.0%) and 2026 (2.4% vs 2.6%). The unemployment rate projections for 2025 and 2026 remained unchanged at 4.5% and 4.4%, respectively.
Meanwhile, ahead of a key jobs data release next week, the latest US labour market displays signs of continued, albeit slow, growth. Job openings rose slightly in October 2025, increasing by 12 000 to 7.7 million. Notable increases occurred in trade, transportation and utilities (+239 000), driven by gains in retail and wholesale trade and in healthcare and social assistance (+49 000). Meanwhile, professional & business services (-114 000), the federal government (-25 000) and leisure & hospitality (-22 000) saw a decline in job openings.
Friday, 12 Dec 2025
