both oil exporters and oil importers alike. the imf forecasts a further rise in the average current account deficit of ssa economies to 3. 9 percent of gdp by 2017. slower growth of exports and larger current account deficits will be detrimental to the development of ssa economies for two reasons. first, exports are an engine of economic growth and economic transformation. fast growing developing economies almost always have successful export sectors. secondly, larger current account deficits must be financed with capital account surpluses. given that official finance ( such as concessional loans from international financial institutions ) is projected to be flat over the medium term, larger capital account surpluses will only be possible if there are substantial increases in net private capital flows, increases which are at best uncertain because of the difficulties facing the advanced economies from where most of these flows originate. moreover, even if larger net inflows of private capital can be attracted to ssa countries to finance current account deficits, private capital flows are likely to be volatile because of the fragility and turbulence on global financial markets, which itself will be a source of instability for the macroeconomy. 3. the policy implications for african economies to thrive in a much more difficult global economic environment, ssa economies will have to prioritise measures to promote stronger export growth and to diversify their export markets away from the traditional markets in advanced economies which face a prolonged period of slow growth. i want to highlight three sets of strategic policy reforms which i believe can contribute to these objectives across a broad range of ssa economies, if not necessarily in all of them. these reforms pertain to the real exchange rate, regional trade and agricultural modernisation. the real exchange rate many empirical studies have established a robust relationship between economic growth and export growth in developing countries and their real exchange rates. overvalued and volatile these data and forecasts are from the imf ’ s world economic outlook, october 2012. bis central bankers ’ speeches real exchange rates are very damaging for export industries and thus for private investment in these industries. hence macroeconomic policy in africa should aim to achieve stable real exchange rates which are, at the very least, not overvalued, and preferably are undervalued, to shift incentives in favour of private investment in traded goods industries. sustaining more depreciated real exchange rates over the long term will only be possible if domestic absorption falls relative to gdp ( so that trade deficits are reduced ).

the pre - covid level and inflation persistently below 2 percent, the economy remains far from our goals, and it will take some time to achieve substantial further progress. by taking a patient approach based on outcomes rather than a preemptive approach based on the outlook, policy will be more effective in achieving broad - based and inclusive maximum employment and inflation that averages 2 percent over time. the combination of patient monetary policy, together with accelerating progress on vaccinations and substantial fiscal stimulus, should support a strong and inclusive recovery as the economy reopens fully. for instance, even with the strongest sep inflation projection since the committee established its 2 percent inflation objective, the median projection from the current sep is not quite strong enough to generate inflation that averages 2 percent from the time the federal funds rate moved to the lower bound through the end of the forecast horizon, which is a key consideration under a temporary price level targeting framework. see ben s. bernanke, michael t. kiley, and john m. roberts ( 2019 ), “ monetary policy strategies for a low - rate environment, ” aea papers and proceedings, vol. 109 ( may ), pp. 421 – 26.