on global economic activity, the war resulted in significantly elevated commodity prices and, therefore, inflationary pressures. in response, there was generalised aggressive increase in policy interest rates and, hence, tightening of financial conditions. according to the international monetary fund ( imf ) ’ s january 2023 world economic outlook ( weo ) update, global inflation increased from 4. 7 percent in 2021 to 8. 8 percent in 20221, while the global economy is estimated to have expanded by 3. 4 percent in 2022, lower than the 6. 2 percent growth in 2021. meanwhile, the continued roll - out of effective covid - 19 vaccinations in both advanced and emerging economies helped contain the spread of the virus and led to further relaxation of covid - 19 control measures, which offset some of the negative shocks experienced during the year. 1. 4 in botswana, real gross domestic product ( gdp ) grew by 6. 4 percent in the twelve months to september 2022, compared to a growth of 8. 9 percent in the year to september 2021. inflation remained above the bank ’ s medium - term objective range in 2022, averaging 12. 2 percent in 2022. 2 contributing to high inflation were the upward adjustments in administered prices and associated second - round effects ; modest _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ in advanced economies, inflation increased from 3. 1 percent in 2021 to 7. 3 percent in 2022, and from 5. 9 percent to 9. 9 percent for emerging market economies in the same period. inflation breached the objective range in may 2021 ( 6. 2 percent ), and has remained above it since, and was 12. 4 percent in december 2022. monetary policy statement february 2023 recovery in domestic demand resulting from the easing of containment measures due to deployment of effective covid - 19 vaccines ; and the increase in foreign prices, particularly food and fuel prices, due to supply disruptions caused by the russiaukraine war ; as well as the resultant elevated inflation expectations. 1. 5 the bank tightened the monetary policy stance during 2022 in view of projections of inflation likely to remain above the 3 – 6 percent objective range in the mediumterm, and the associated indications of entrenched expectations for higher levels of inflation. the monetary policy rate ( mopr ) 3 was, therefore, increased by a cumulative 151 basis points to 2. 65 percent in 2022

imf advice, and facilitate more timely publication of surveillance reports, instead of the current protracted exchanges, in some cases, on the findings of fund surveillance missions. this is not to suggest that there should be no scope for a more constructive dialogue, especially in areas where the difference between fact and perception is negligible. as it should be, the managing director espouses the view that the fund must be trusted to give even - handed advice and fair representation to all its members. i need not emphasise that the role of the executive board is to ensure that this trust is earned and then maintained. governance as i come to the end of my remarks, i would like to devote a few minutes to the related and equally important topical issue of governance, which is one of the principal themes of your retreat. you may be interested to note that, earlier this year, the bank of botswana hosted a two - day workshop for sadc central banks on trends in central bank governance, with technical input and assistance from the central bank of sweden, bank for international settlements and the fund. unsurprisingly, it was found that there is diversity in the internal governance structures and procedures required to ensure good governance of an autonomous central bank, and it was further noted that consensus is yet to emerge regarding best practice in the conduct of a central bank in its relations with various stakeholders. diversity was due to several factors, among which are historical and socio - political characteristics of a country. nevertheless, there were common pillars that are a basis of good governance, namely, accountability, transparency and avoidance of conflict of interests by boards and management. evidently, governance issues in the fund are similar and equally challenging. it follows, therefore, that despite the diversity of the 185 member countries, the governance of the fund must, of necessity, be based on these principles. you will agree that unless the fund is seen to be managed according to the highest standards of good governance, which enshrine widely accepted notions of fairness and accountability in its operations and decision - making, including in staff appointments, then its relevance and objectivity will continue to be questioned. the executive directors themselves do, of course, strive to be above reproach on this matter, and it is important to stress that, from the member countries ’ point of view, the buck of accountability stops with you, as you are effectively the guardians of this institution. unfortunately, recent events at the world bank are not encouraging. while almost every independent commentator saw