timing is still uncertain, as is the pace and timing of future increases. monetary policy in the uk is also expected to be tightened later this year or early next year. by contrast, monetary policy in japan and the eurozone remains highly accommodative, and is expected to remain so for some time. changing expectations with respect to monetary policy stances in the advanced economies are likely to keep emerging - market currencies relatively volatile, as capital flows respond to these developments. the rand was particularly vulnerable to changes in risk perceptions, having depreciated by about 10 per cent on a trade - weighted basis during the financial year under review. since april 2015 it has depreciated by a further 4, 5 per cent. however, domestic factors also contributed to this depreciating trend. these included the persistently wide current - account deficit of around 5 per cent of gdp, the strained labour relations environment, and the weak growth outlook. the past financial year was particularly difficult for the domestic economy, which had to contend with a protracted strike in the platinum sector followed by a strike by metal workers. the downward pressure on growth was exacerbated by the resumption of regular electricity load - shedding by eskom, which is expected to continue for some time. bis central bankers ’ speeches the outlook for the economy remains subdued following a growth rate of 1, 5 per cent in 2014. the bank forecasts economic growth of 2, 0 and 2, 1 per cent in 2015 and 2016, rising to 2, 6 per cent in 2017 when the electricity supply constraint is expected to ease to some extent. growth in private - sector gross fixed capital formation remains weak but it improved somewhat in the second half of 2014 and the first quarter of 2015, following a contraction in the first half last year. household consumption expenditure grew by less than 2 per cent amid low credit extension to households, weak employment growth and a sharp decline in consumer confidence. headline inflation, which had exceeded the target for five consecutive months during 2014, returned to within the target range of 3 to 6 per cent in september and has remained within the range since then. in the wake of the international oil price decline, inflation reached a low of 3, 9 per cent in february 2015 and has been increasing steadily since then, and measured 4, 7 per cent in june. the bank expects inflation to temporarily breach the upper end of the target range during the first two quarters of 2016, with upside risks

uncomfortably high current account and fiscal deficits ( in the face of global monetary policy normalisation ), high inflationary pressures, and weak domestic growth pose a challenge for both monetary and fiscal policy. these have required a balanced policy response in an effort to ensure a sustainable growth path for our economy. so how is south africa doing? let me quote you a paragraph from last week ’ s economist magazine : “ it was great while it lasted. in a golden period from 2003 to 2010 …. economies grew at an annual average rate of close to 5 %, wages rose and unemployment fell, … people were lifted out of poverty and the middle class swelled …. but now the growth spurt is over. what some worried would be a ‘ new normal ’ of expansion of 3 % a year is turning out to be far worse. the … economy will on average grow by only around 1. 3 % this year. ” 3 no, in this case the economist is not referring to south africa – the quote is actually for the latin american region. but it is very much also our own story. indeed, the ongoing emerging market slowdown serves to remind us of the protracted nature of previous crisis episodes, including the 1997 – 1998 asian crisis and the 2008 – 09 world financial crisis. however, there are limits to similarities among ems, which may lead to differentiation when assessing countries. for example, south africa ’ s export performance relative to a number of peers remains poor – irrespective of whether they are commodity exporters ( australia ), or have also experienced significant exchange rate depreciation ( india, turkey ), or both ( brazil and chile ). the fact that south africa has grown its exports less than its peers, implies that the domestic economy is suffering from something more than weak global demand and declining commodity prices. south africa ’ s weak performance is also visible in the country ’ s declining share of world exports, which declined from around 0. 7 % of world merchandise exports to 0. 55 % over the last 10 years. perplexingly, sa ’ s portion of global exports has remained roughly stable since 2011, at about the level last attained at the height of the great recession, despite pronounced currency depreciation over that entire period. with global growth – particularly in the eu, our largest trading partner – under severe pressure, we increasingly relied on the domestic non - tradeables sector to prop up domestic growth as it would have been difficult to ramp up exports. unfortunately not all