in the us and some parts of eastern europe, and resilient international crude oil prices pose potentially serious risks to the outlook. the combination of slowing growth and rising prices presents difficult challenges for monetary policy. global conditions impact on south africa, and this, alongside domestic factors, has been reflected in our own downward revisions to the forecast for domestic economic growth. for 2012 we expect the economy to grow by about 2. 6 per cent, rising to 3. 4 per cent in 2013 as the global economy starts to recover. the economy grew by 3. 2 per cent in the second quarter of 2012, but this reflects a distortion arising from the strong contribution from the mining sector which recovered from a deep contraction in the first quarter. non - mining real output growth measured a low 1. 7 per cent. the us congress passed a “ continuing resolution ” which authorizes funding of the us government through march 2013 at current spending levels. this provides room for discussion about the scheduling of withdrawal of tax cuts and enactment of spending cuts over the next few months without the risk of needing to address a government shutdown. it does not remove the fiscal cliff. household spending continues to provide much of the growth in the economy. investment strengthened in the latter half of 2011 and growth has been sustained into 2012, rising by 5. 7 per cent in the second quarter of this year. however, private sector gross fixed capital formation remains weak, with the balance of growth in investment arising from activities of public corporations. job creation has picked up, but again remains sluggish. statistics south africa shows 123, 000 jobs created from mid - year 2011 to mid - year 2012, about one third of which were in the public sector. the current level of formal sector employment is still about 60, 000 less than that reached before the onset of the crisis. the stronger growth in the domestic economy that we saw in the first half of 2012 was reflected in better credit extension figures. these have since moderated from 9. 2 per cent in march, to 7. 3 per cent and 7, 8 per cent in july and august respectively. credit extension to households rose by 8. 1 per cent in july and 9, 0 per cent in august, while credit extended to the corporate sector eased somewhat. mortgage loans remained subdued, while instalment sale credit and leasing finance reflect robust vehicle sales. unsecured lending has continued to rise rapidly, although again somewhat slower in recent months than in the first quarter of this year. partly as

7 4. 5 5. 39 - 0. 2 1. 55 1. 29 1. 19 0. 12 3. 05 1. 81 3. 87 3. 02 4. 27 5. 89 3. 11 2. 19 5. 35 3. 3 2. 86 4. 04 2. 64 3. 46 1. 78 3. 49 2. 67 - 0. 17 5. 22 2. 78 5. 08 1. 01 1. 93 0. 51 - 1. 12 3. 11 - 6 - 1. 2 3. 52 - 3. 48 - 2. 06 2. 79 - 0. 81 4. 01 5. 05 3. 65 3. 94 4. 19 3. 96 1. 61 5. 1 3. 57 2. 71 5. 39 6. 21 4. 2 2. 68 5. 03 4. 66 2. 03 3. 91 4. 45 3. 25 5. 32 1. 26 1. 99 2. 28 2. 48 1. 5 1. 83 2. 34 0. 98 2. 01 4. 23 3. 96 4. 12 3. 16 2. 59 2. 92 4. 3 2. 45 4. 41 3. 31 2. 65 5. 34 - 0. 61 0. 04 0. 29 - 5. 03 - 1. 67 - 8. 35 6. 13 0. 68 3. 73 3. 94 1. 6 2. 85 bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches