united states ( us ) and eurozone, this appears to have diminished in recent months. these market - related stresses were not enough to derail the hiking cycles of the advanced economies, with the us federal reserve and european central bank hiking by an additional 75 and 100 basis points respectively since march 2023. the persistence of inflation despite the sustained interest rate hikes by some central banks suggests that global neutral interest rates have risen well above their pandemic levels. as we move towards 2024, central banks around the world will be watching carefully for additional evidence of changes in neutral real rates. with global financial conditions adjusting and risk - adjusted real interest rate differentials widening, portfolio flows will become less certain, affecting the availability and the cost of external funding. these rising credit costs will further impair the financing of large fiscal and current account deficits in many emerging market and developing economies ( emdes ), including south africa. many economies have experienced sustained increases in public debt levels, which, with higher inflation, create serious headwinds to economic growth. as exchange rates depreciate in response to the more adverse credit conditions, imported inflation tends to rise – a trend already seen in producer prices, fuel costs and food prices, among other items. emdes will need to consolidate their fiscal positions over the coming years helping indirectly to reduce exchange rate passthrough pressures and inflation and its wide - ranging economic costs. domestic conditions south africa's recovery from the covid - 19 pandemic was driven by demand expansion and a supply rebound following the easing of pandemic - induced restrictions. this generated a strong, but incomplete, recovery from the 6. 0 % contraction experienced during 2020. while growth rebounded by 4. 9 % in 2021, activity subsequently slowed to 2. 0 % in 2022, and by 2023 even lower growth was expected as the energy crisis facing the country worsened. the sarb forecasts gross domestic product ( gdp ) growth at 0. 4 % this year, and expects it to average about 1 % over the next two years. south africa's post - covid - 19 recovery reflects various domestic idiosyncrasies such as political unrest, disruptive strikes, extreme weather conditions and failing infrastructure. although load - shedding entered the south african lexicon 15 years ago, it has intensified over the past two years, placing a binding constraint on growth. the sarb estimates that growth over the 2023 – 2025 period would be

on average been higher under the new regime. it also appears that, if anything, the real stability of the economy has improved. nevertheless, there is always good reason to consider how monetary policy can be developed and improved. to this end, i have discussed how the riksbank ’ s monetary policy work can be developed. this has included what could be termed technical improvements ; for instance, greater use of other assumptions than an unchanged repo rate and an extended forecast horizon when producing and presenting data. the advantage of using, for example, implied forward rates as a basis is that they can often be a more realistic assumption than an unchanged interest rate. this can in turn allow more and better alternative scenarios, which can illustrate different aspects of monetary policy including the consequences for inflation and resource utilisation over a longer time horizon. it has also included the riksbank ’ s communication. working with a longer time horizon provides a better overview of the effects of temporary influences on inflation. scenarios containing different assumptions regarding the repo rate and using a longer time horizon can also contribute to a clearer illustration of the considerations monetary policy has to take into account with regard to balancing inflation against real economic aspects. i have also discussed this. the primary advantage of supplementing the assumption of an unchanged repo rate with alternative interest rate paths and making longer - term forecasts is that it makes it easier to explain the monetary policy message. the simple policy rule – which involves interest rate decisions being based on inflation normally being returned to the target one to two years ahead – will continue to provide a good guide to our actions. the guidelines in the clarification from 1999 will thus continue to form the basis of our monetary policy. when the decisions need to take account of other information than that significant for inflation one to two years ahead, the new working method should make it easier to understand how this is done. discussing an entire interest rate path can also create the conditions for a more balanced discussion of monetary policy. this can involve when we intend to change our monetary policy stance and how quickly we should proceed. what will happen if we wait a while before changing the interest rate? this type of consideration is probably more important than detailed discussions about tenths of a percentage point in a forecast. in conclusion, i have also mentioned the fundamental framework that governs monetary policy. this is mainly because it is sometimes claimed in the general debate that the riksbank and other inflationtargeting countries have bound themselves too tightly to a particular