adopted. furthermore, growth in developing countries, for some time the mainstay of the world economy, is also slowing and contributing to the recent downward revision of global growth by the imf in the order of 0, 2 per cent to 3, 1 per cent and 3, 8 per cent for 2013 and 2014, respectively. south africa is affected by these international developments in three ways. firstly, our ability to export to our major trading partners is weakened. for example, our major manufactured export sector is the motor vehicle sector and most of our car exports go to europe. the eurozone has just had its worst quarter for car sales in 17 years. secondly, lower global growth lowers commodity prices. this has the benefit for lowering global inflation, but as a major commodity exporter, it affects our terms of trade and our ability to earn foreign exchange. finally, monetary policy and changes in monetary policy in advanced economies is causing excessive volatility in the rand exchange rate. during the early periods of bis central bankers ’ speeches quantitative easing, the country was able to attract significant capital inflows. this assisted the financing of the current account deficit but it also led to a period of strength for the currency which impacted on exporting sectors. the anticipated reversal of quantitative easing have contributed to a slowdown in capital inflows and a depreciation in the exchange rate, which is likely to add further upward pressure on inflation due to pass through effects. domestic economic developments on the domestic front, lower output from the mining sector and electricity constraints are limiting growth and contributed to the widening of the current account deficit. the bank has recently lowered its growth projection for 2013 to 2 per cent. the official unemployment rate increased from 25, 2 per cent in the first quarter of 2013 to 25, 6 per cent in the second quarter of 2013. of some concern is the increase in the youth unemployment rate to 52, 9 per cent during the first quarter of 2013. the inflation outlook continues to deteriorate and is expected to be higher on average by 0, 1 and 0, 3 percentage points at 5, 9 per cent and 5, 5 per cent in 2013 and 2014, respectively. inflation is projected to temporarily breach the target range in the third quarter of 2013, at a slightly higher average level of 6, 3 per cent. this results in conflicting policy choices relating to rising inflation against the back drop of weak growth. it is however important to note that south africa ’ s growth performance has lagged that

mr duisenberg ’ s opening statement at the press conference held on 22 december 1998 introductory statement by the president of the european central bank, dr w f duisenberg, at the press conference held in frankfurt on 22 / 12 / 98 ladies and gentlemen, the vice - president and i are here today to report on the outcome of today ’ s meeting of the governing council of the european central bank at which we took the opportunity to finalise a number of issues of a rather technical or legal nature ahead of the forthcoming changeover weekend. let me first turn to the governing council ’ s discussion on recent economic, monetary and financial developments and the decisions that the governing council has taken today in the field of monetary policy. on 1 january 1999 the escb will assume responsibility for defining and implementing the single monetary policy of the euro area. the governing council of the ecb deemed it appropriate to announce in advance the interest rates that will apply to the monetary policy instruments of the escb as from the start of stage three. this should eliminate any remaining uncertainties about the monetary policy stance of the escb and contribute to a smooth changeover to stage three of economic and monetary union. as you have already been informed, the following decisions were taken : • first, the governing council decided to conduct the first main refinancing operation of the escb as a fixed rate tender and to set the level of the interest rate for this operation at 3 %, in line with the key central bank rates prevailing at the end of stage two. this operation will be initiated on 4 january 1999, the allotment decision will be taken on 5 january, and the settlement will take place on 7 january. the first longer - term refinancing operation will be announced on 12 january. the governing council has already decided that it will be conducted through the single variable rate auction procedure. • second, with respect to the interest rates on the escb ’ s standing facilities, which are designed to form a corridor for movements in short - term money market rates, the governing council decided that the interest rate for the marginal lending facility will be set at a level of 4. 50 % and the interest rate for the deposit facility at a level of 2 %. these are the rates of the escb ’ s standing facilities at the start of stage three, i. e. 1 january 1999. • third, however, as a transitory measure, between 4 january and 21 january, the interest rate for the marginal