corroborated by corporate finance data which show that the share of raw material costs as a percentage of both expenditure and sales has been rising ( chart 5 ). bis central bankers ’ speeches demand factors price pressures can emanate from the supply side but it will be difficult to sustain it without rising demand. in this context, important information on recent trend in expenditure pattern and wages is available from the 66th round of nsso consumption survey and labour bureau. the average annual monthly per capita expenditure has increased at a faster pace in the second half of 2000s as compared with the first half, both in nominal and real terms ( table 6 ). while the share of per - capita expenditure in food has gone down, as could be expected from rise in income levels, both in rural and urban centers, the dietary pattern has shifted in favour of protein items whose share has gone up markedly in the second half of 2000s ( chart 6 ). bis central bankers ’ speeches the sharp increase in rural consumption of protein seems to have been sustained by increase in wage rates of the unskilled rural labourers both in nominal and real terms ( chart 7 ). in the formal sector, company finance data suggest that the wage bill has risen at a faster rate since the middle of 2009 – 10 ( chart 8 ). bis central bankers ’ speeches as per the nsso surveys ( 61st round and 66th round ), nominal wage rates of skilled workers in both rural and urban areas increased much faster in the second half of the 2000s than in the first half. while the real wage rates declined in the first half, it increased significantly in the second half of 2000s ( charts 9 & 10 ). bis central bankers ’ speeches there has also been added stimulus from the crisis driven fiscal expansion as the fiscal consolidation process was reversed in 2008 – 09 and continued through 2009 – 10 ( chart 11 ). these evidences taken together suggest that sustained rise in real wages both in the formal and informal sectors in the recent years contributed to increase in demand. conclusions the recent surge in inflation has become more generalised. food inflation, prone to supply shocks, is also assuming a structural character given the change in the dietary habits and high demand, in absence of adequate supply response. sharp increase in non - food manufactured product inflation suggests that producers are able to pass on the cost increases, given higher demand. while the persistence in non - food manufactured products inflation is high, the persistence of food inflation has increased making the overall inflation rate sticky. the

daniel mminele : flourishing in financial markets post crisis – how do we achieve this? address by mr daniel mminele, deputy governor of the south african reserve bank, at the gordon institute of business science conference on “ flourishing in financial markets post crisis – how do we achieve this? ”, johannesburg, 2 october 2012. * 1. * * introduction good morning ladies and gentlemen and thank you to the gordon institute of business science ( gibs ), payments association south africa ( pasa ) and strate, for the invitation to provide the opening remarks this morning. let me at the outset congratulate the organisers for putting together a programme that is quite wide - ranging in terms of content, and brings together a broad spectrum of speakers to provide different perspectives from their respective vantage points in the financial markets and financial market infrastructure space. unfortunately, i will not be able to stay for the rest of the day. the theme of the conference : “ flourishing in financial markets post crisis – how do we achieve this? ” is encouragingly forward - looking and results - oriented – how do we get there, how do we achieve this? allow me, however, to sound a word of caution when it comes to post crisis, because such a characterisation would be pre - mature at this stage. the crisis is not over yet, and in fact may be deepening. global economic prospects and financial market conditions have been deteriorating in recent months, growth projections for 2012 and 2013 are being adjusted lower, and indications are that the balance of risks is firmly on the downside. the three main risks to a sustained recovery of the global economy on our way to a post crisis environment are : ( i ) the on - going sovereign debt crisis in the euro area ( with feedback loops into the banking system ), ( ii ) the fiscal situation in the united states with regard to the so - called “ fiscal cliff ”, and ( iii ) resurgent oil prices and rapidly rising global food prices. all three factors represent external shocks that weigh on household disposable income and economic growth, with a disproportionate impact on emerging markets and lower income households ( where food is a larger share of the consumption basket ). while the authorities in the euro area have recently made significant efforts to help address weaknesses in their economies, such as through the recent announcement of the european central bank ’ s outright monetary transactions programme and the ratification of the european stability mechanism by the german federal constitutional court, the