half a percentage point so far in 2007. more specifically, this year there has been an overall decline in inflation rates among traditional high - inflation countries compared with last year. however, since august, inflation rates in all countries have risen, probably as a result of higher oil and food prices. this implies that dispersion in the euro area is currently somewhat below inflation dispersion among the 14 us metropolitan statistical areas, where it has fluctuated around 1 percentage point over the last two decades. the dispersion in real gdp growth rates, measured in terms of the unweighted standard deviation, has been moving around a level of 2 percentage points over the past few decades, with no apparent upward or downward trend. this is similar to the dispersion witnessed in output growth across regions within the united states. the persistence of macroeconomic developments in the euro area a key feature of the observed economic diversity is the persistence of macroeconomic developments across euro area countries. for example, the difference in the cumulated growth of real gdp between the two euro area countries with the largest and the smallest output increases, respectively, was more than 50 percentage points in the period 1998 - 2006. the situation was similar across us states. furthermore, the equivalent accumulated spread between the two euro area countries with the lowest and highest inflation rates was almost 20 percentage points and in unit labour costs for the total economy between 20 and 25 cpis data, imf, 2005. percentage points over the same period. in the united states, the spread in cpi inflation between the two metropolitan areas with the lowest and highest inflation rates was slightly lower, at around 18 % for the same period. in the euro area, in addition to the decline in dispersion of inflation, activity and labour cost developments, another key feature is that business cycles are converging and output gap fluctuations are becoming more similar across countries. this feature is not apparent in the united states, where the dispersion of cycles and of trend gdp growth, seem to explain roughly equal parts of growth dispersion between states. for instance, last year, the acceleration in activity and the rebound in the euro area ’ s real gdp growth was a widely shared phenomenon across the various euro area member countries. hence, registered growth dispersion across the euro area countries seems to be mainly explained by differences in trend output growth, rather than cyclical developments, a feature i would like to reflect more on. differences in trend output growth in the euro area the differences

goods - is likely to remain sticky over the next few months, before starting to ease over the medium term. for now though, prices of exchange ratesensitive goods continue to accelerate. in the services sector, while some components have surprised on the downside over recent months, we may start to see the margins in some of these sectors, such as insurance and housing, also starting to pick up pace and, as such, exert upside pressure on overall inflation. as we have communicated before, the sarb will continue to monitor price developments and act to guide inflation back to the midpoint of the target band over the medium term. elsewhere in the world, major central banks have repeatedly indicated that they have not yet completed their policy normalisation. they may need to keep policy in restrictive territory for an extended period until clear signs emerge that inflation is returning sustainably to target. implications for growth 2 / 5 bis - central bankers'speeches the number and pace of rate hikes needed to fight global inflation suggests we are likely to see weaker world growth in 2023, even ashousehold cash buffers and corporate profitability have limited the downside risk, so far. the international monetary fund ( imf ) forecasts global growth of 2. 9 % this year, after growth of 3. 4 % in 2022, and this means weaker demand for the exports of small, open economies such as south africa. implications for the domestic economy are twofold : first, directly through weaker growth, and second, through a possible deterioration in our external accounts. amid weaker exports volumes, combined with south africa's persistent and more intensive loadshedding as well as a deterioration of its ports and railway infrastructure, the sarb's gross domestic product ( gdp ) growth forecast for this year currently sits at 0. 3 %. stats sa published the q4 gdp report this morning and the outcome was much weaker than what we thought it would be. it seems like the adverse impact of these factors has already started materialising, placing further downside risk to our current forecast. 2022q4 gdp came in at - 1. 3 %, bringing growth for the year 2022 to 2. 0 % – below our estimate of 2. 5 % at the january mpc meeting. a deep dive into these numbers shows that the decline was broad - based over the quarter, with 7 out of the 10 sectors detracting from gdp growth. from the expenditure side, we note the pressures faced by households