emerging markets. in addition, it also implies more dedicated bond inflows into our market, possibly of a more lasting nature. another area of the bond market, which has seen significant issuance over the years, is that of the eurorand bond market. the demand for randdenominated bonds issued by highly rated nonresident institutions contributes positively to the value of both the rand and domestic bonds. the government debt consolidation process has allowed the cost of borrowing to decline markedly. sound debt management has been such that new issuance is spread across the maturity spectrum of the yield curve. the bond market has become a more appealing corporate finance tool and, as such, corporate listings have become more popular. since the very first listing of a corporate bond ( south african breweries ) in 1994, the corporate bond market has increased considerably in size. innovation in this sector has been impressive – from issuance of vanilla bonds to securitisations and commercial paper. not only do these innovations offer debt at lower interest rates than vanilla bonds, but also provide lower income groups with access to home mortgage finance. the introduction of inflation - linked government bonds in 2000 was a further significant innovation and is quite helpful in providing monetary policymakers and analysts with important information on inflation expectations through readings of the so - called breakeven inflation rate. whilst much has been achieved, there are still many opportunities and challenges ahead. non - government bond issuance has increased sharply ; however, banks continue to account for the bulk of this issuance. in addition, the buy - and - hold approach to corporate bonds and inflation - linked bonds, in particular, renders these segments of the bond market relatively illiquid. the municipal bond market is still in a developing stage but can certainly contribute to enhancing the breadth and depth of the domestic bond market. finally, the significant amount of infrastructure spending planned for the next few years is likely to boost the supply of corporate bonds and therefore increase liquidity in this market. the corporate bond market has increased in size from accounting for 5 per cent of the total bond market at the end of 2001 to almost 30 per cent today. this increase in corporate sector issuance was mainly due to the reduction in the supply of government bonds, lower financing costs and an upbeat corporate sector. in 2006, net issuance in the nongovernment sector amounted to r41, 0 billion ( excluding securitised assets ). net issuance emanated mainly from the corporate sector, with only

temporary shutdown of government services. but the deceleration in other countries, amid a slowdown in global trade flows, surprised many by its magnitude. the eurozone slowed from 2. 4 % in 2017 to 1. 8 % last year, as weakening exports to asia, the united kingdom ( uk ) and eastern europe took a toll on business confidence. the world bank now only expects a 1. 2 % increase in the eurozone ’ s gross domestic product ( gdp ) this year. china has also lost momentum, as earlier policy tightening curtailed lending by the non - bank financial sector and the tariff increases of 2018 weighed on exports. by late 2018, these negative economic surprises had reached levels ample enough to trigger a bout of risk aversion in financial markets, which particularly affected equities 1 media call on the june 2019 global economic prospects report, world bank group, washington dc, united states page 2 of 10 and corporate bonds ( although emerging market currencies and fixed - income markets were relatively sheltered ). global financial conditions tightened. this tightening, however, proved short - lived, as the continuation of benign ( and, in some cases, soft ) inflation developments allowed major central banks to pause, or delay, the start of their normalisation process. in the us, in particular, indications by the federal reserve ( fed ) that it could be patient before making any policy decisions helped equities and corporate bonds to recover their earlier losses. nonetheless, many threats to global expansion remain unresolved, and in some cases risks previously identified have begun to materialise. first and foremost among these are the trade tensions between some of the world ’ s major economies. in the wake of the recent increases in us tariffs on selected chinese imports, and in light of the potential for broader tariff increases, analysts are already anticipating a bigger drag on global growth from what increasingly looks like a protracted trade conflict. in its most recent surveillance note for the g20 finance ministers and central bank governors, for the meetings in fukuoka, japan, 10 days ago, the imf noted these additional tariffs would “ dampen trade and weigh on confidence and financial sentiment, adversely impacting investment and productivity and growth. ” separately, the uk ’ s parliament is struggling to agree on the terms for leaving the european union, with negative consequences for growth and investment and some spillovers to continental europe. financial markets have displayed sensitivity to these developments. at the same time, a number of geopolitical tensions