in traffic volumes since the implementation of the gauteng freeway improvement programme. furthermore, petrol consumption has also declined as less time is spent idling on the highways, not to mention improved road safety and reduced vehicle running costs. the need for and benefit of such economic efficiencies brought about through an expanded infrastructure programme cannot be overestimated. investment in infrastructure is for the benefit of both current and future generations, and should provide the private sector with a longer term time horizon, encouraging private investment, which has been very weak over the past few years. we hope that the private sector will respond appropriately, and public - private partnerships should be promoted in the process. growth in gross fixed capital formation is currently led by state owned enterprises, but for south africa to reach its growth potential the private sector ’ s role is essential. in general, the private sector contributes around two thirds of such investment. gross fixed capital formation as a ratio to gdp presently stands at 19 per cent, down from a high of 23 per cent in 2008, and compared for instance with that of indonesia, a fast - growing emerging market, where it stands at over 30 per cent. south africa ’ s infrastructure programme will have benefits for many sectors in the economy. going beyond south africa, africa ’ s infrastructure investment increased from about bis central bankers ’ speeches us $ 10 billion in 2000 to about us $ 45 billion in 2010, and is set to rise to us $ 93 billion a year by 2020. south african construction firms are well placed to be an integral part of these opportunities in our region. in the 1960s, korean construction firms won large contracts to build roads in south east asia. these firms sourced their inputs from south korean manufacturers, providing the first growth stimulus for them. similarly, south african construction firms can grow their order books globally and use a proportion of south africa material and capital equipment, stimulating our manufacturing sector. long term growth requires a partnership between the public and private sectors, which requires a much longer horizon. too often we are caught up in the paralysis of shorttermism. a long term perspective requires policy certainty, trust in institutions and confidence in the longer term growth outlook. there is increased recognition within the private sector that sustainable earnings growth requires such a longer term horizon and the chase for short term returns is not always consistent with longer term sustainable growth. at least some of our woes in the mining sector arise from a degree of short termism amongst all stakeholders in the sector. before the era of global

cumulative 475 basis points since the hiking cycle began in november 2021. at the current level of 8. 25 %, monetary policy in south africa is now considered restrictive. while the mpc paused the hiking cycle in july, the committee will continue to assess inflation developments, and will act appropriately to steer inflation to the midpoint of the 3 – 6 % target band ( 4. 5 % ) to create an environment conducive to balanced and sustainable economic growth in the interest of all south africans. inflation outlook as food and fuel inflation have eased, mostly reflecting base effects, so has headline inflation, which recorded a low of 4. 7 % in july 2023. going forward, we expect to see 6 diesel is used in many production processes, including agriculture. 7 the limpopo province has not been spared. inflation in the province rose sharply and peaked at 8. 9 % in july 2022, but unlike the rest of the country, inflation in the province declined markedly to 4. 4 % in july this year. further moderation in headline inflation on the back of further declines in fuel and food inflation as well as the cumulative effects of the repo rate increases to date. this should help ease the burden of high costs for both consumers and businesses. however, core inflation has exhibited signs of stickiness, much like we have seen at the global level. core inflation was initially pushed up by markedly higher global goods inflation and exacerbated by the depreciation of the rand. inflationary pressures have, however, broadened within the core basket, in part reflecting spillover and secondround effects from the high fuel and food price increases over the past year. within the core basket, inflation has been driven mostly by core goods, and to a lesser extent, services. 8 housing ‒ the largest services component ‒ has experienced subdued inflation since the pandemic. this has helped to keep services inflation more muted and slowed the rise in core inflation. core inflation is expected to average 4. 9 % this year. risks to the domestic inflation outlook are on the upside. although some food price components have eased over the past few months, domestic food price inflation is still elevated ( 10 % in july 2023 ), while the risk of drier weather conditions in coming months has increased. domestic food prices also remain at risk from exchange rate volatility as well as the impact of geopolitical developments, particularly following russia ’ s decision to withdraw from the black sea grain initiative agreement