up causing financial crises. i don ’ t think south africa has these problems yet. right now, we don ’ t have the high inflation and high interest rates of the past, but we also don ’ t have the zero rates and close - to - zero inflation of the rich countries. the inflation - targeting paradigm is working pretty well. given all the challenges facing south africa, we should recognise that monetary policy is the last place where we should consider risky changes. we have a well - established 16 joseph kopecky and alan m. taylor, april 2020, ‘ the murder - suicide of the rentier : population aging and the risk premium ’, available at https : / / www. nber. org / papers / w26943. pdf. 17 atif mian, ludwig straub and amir sufi, 26 march 2020, ‘ indebted demand ’, available at https : / / scholar. harvard. edu / files / straub / files / mss _ indebteddemand. pdf, especially p. 4. 18 for instance, see paul volcker with christine harper, 2018, keeping at it, p. 227. inflation - targeting framework, which is delivering low interest rates and low inflation. this is the most functional part of the macroeconomic framework. unfortunately, getting monetary policy right isn ’ t going to be enough. south africa ’ s debt situation is critical. and our rebound from lockdown is looking weak compared with other countries. 19 as a country, we need to find a path back to fiscal sustainability and growth. we can borrow from new creditors ; we can shift our debt towards shortterm borrowing ; we can move things around different balance sheets – but this is not a recovery strategy ; it is just a way to buy time. if public sector borrowing were the way to achieve sustained growth, the last 10 years of debt accumulation should have been enough. the real task now is restoring our fiscal credibility and implementing structural reforms so the economy has a way to become more efficient and grow. in many ways, as a country, we seem to be depressed, unable to get out of bed. yes, it ’ s winter, and it ’ s cold. but we can ’ t live like this. spring is coming, and inflation and interest rates are low. we need to focus on the opportunities, get up, and get to work. thank you. 19 based on consensus forecasts, three - quarters of countries

to be effective. more likely, we would find ourselves in arthur burns ’ shoes : we would not get unemployment permanently lower, but we would be stuck with higher inflation, making our growth and jobs challenges even worse. we want to be crystal - clear that we won ’ t make that mistake. with inflation well anchored, moves to lower interest rates should get us more real growth than inflation. and this is exactly where we are now. but doesn ’ t everyone have low inflation now? isn ’ t this due to the coronavirus, not monetary policy? this brings me to the second common argument we have heard, which is that lower inflation has been a global phenomenon, not an accomplishment of inflation targeting. go % 20at % 20ukzn % 20graduate % 20school % 20of % 20business % 20and % 20leadership. pdf, especially pp. 7 - 9. 6 employment could be used in place of an output gap, but this would be a less comprehensive assessment of how strong or weak the economy is, and the data are even more difficult to use than output gap estimates. 7 for a detailed discussion of this subject, see lesetja kganyago, 24 august 2016, ‘ inflation, but no jobs or growth ’, available at https : / / www. resbank. co. za / lists / speeches / attachments / 478 / address % 20by % 20governor % 20kganya go % 20at % 20the % 20labour % 20law % 20conference % 20 - % 2024 % 20august % 202016. pdf. there ’ s no doubt that global factors affect inflation. globalisation and low - cost manufacturing have made many goods cheaper. the recent collapse in oil prices has been a big disinflationary shock. but we also have good evidence that countries with independent, inflation - targeting central banks have lower and less volatile inflation. 8 and we can see that there are still countries with high inflation rates, despite low global inflation. the easy examples of this are the hyperinflation cases, like venezuela and zimbabwe. but there are less extreme cases that show the value of sensible monetary policy. consider turkey, a middle - income country like south africa. in june this year, turkish inflation was 12. 6 %. in south africa, it was 2. 2 %. both these economies had low growth, of less than 1 %, before covid -