the exchange value of the rand. essentially driven by a slowdown in imported inflation at the time, the year - on - year rate of increase in the all - goods production price index slowed down from 10, 0 per cent in december 2000 to 7, 8 per cent in september 2001. it then accelerated sharply to 14, 1 per cent in march 2002 on account of the depreciation in the value of the rand and the related surge in the imported component of the production price index and in the prices of import - competing domestically - produced goods. to this account of inflation developments must also be added the fact that both the money supply and bank credit extension are rising at double - digit rates. as far as the money supply is concerned, the growth over twelve months in m3 accelerated from 17, 0 per cent in december 2001 to around 19 per cent in both january and february 2002, receding slightly to 18 per cent in march. financial market volatility contributed to the public's strong demand for monetary assets. finally, government's finances are healthy due to firm control over expenditure and continued buoyancy in tax collections. the national government's deficit before borrowing for 2001 / 02 amounted to some 1½ per cent of gdp, which indicates a high level of discipline. the non - financial public - sector borrowing requirement amounted to r11, 5 billion in fiscal 2000 / 01, or 1, 3 per cent of gross domestic product. the non - financial public - sector borrowing requirement in the first nine months of fiscal 2001 / 02 amounted to a surplus of r3, 4 billion, or 0, 5 per cent of gross domestic product. 8. conclusion in conclusion, it appears as that the slowdown in the global economy seems to have tapered off. the industrialised world, led by the united states, is experiencing vast improvements in economic conditions. this augurs well for economic prospects in the world economy. in general the emerging economies are expected to benefit from a resurgence in external demand. however, it is important to realise that there are some risks that threaten the pace and magnitude of the global recovery. the volatile geopolitical environment surrounding the oil market is one such risk. further, with the upturn in economic activity, it is to be expected that government spending that helped to make the recession short - lived will be curtailed. in addition, expansionary monetary policy that has been a characteristic of the last year will become more contractionary to keep inflationary pressures in check

barrel at the end of 2000, crude oil prices weakened in 2001 with the slowdown in the world economy. the price of brent crude reached a six - month high of $ 27 per barrel in early april 2002 as a result of the tension in the middle east, the economic recovery in the united states, iraq's 30 - day sales embargo and a disruption in oil supplies caused by a strike at venezuela's state oil company. however, with saudi arabia pledging to replace iraqi exports and the ousting of the venezuelan president fuelling expectations of a less stringent oil policy, the price dropped to $ 23 per barrel in the middle of april. with the return of president chavez to power the oil price once again increased to levels above $ 27 per barrel. crude oil prices, however, recently fell more than 1 per cent after israeli forces pulled out of the palestinian leader's headquarters, easing concern that the conflict may escalate and disrupt middle east oil flows. 3. prospects for the us among the industrialised countries, the upturn is expected to be the strongest in the united states. this upswing is driven by a sharp turnaround in the inventory cycle, as well as substantial reductions in interest rates and tax cuts over the past year. in the first quarter of 2002 the united states economy grew at a seasonally adjusted and annualised rate of 5, 8 per cent, following an increase of 1, 7 per cent in the previous quarter and a contraction of 1, 3 per cent in the third quarter of 2001. this is the strongest pace in more than two years underpinned by increases in consumer spending and the yearlong trend of sharp cutbacks in business inventories is showing signs of tapering off. the acceleration in real gdp growth in the first quarter of 2002 primarily reflected upturns in private inventory investment, exports and residential fixed investment. a gradual strengthening in business investment is expected to underpin the recovery in the second half of 2002 and into 2003. 4. euro area and the united kingdom the euro area economy had contracted at a seasonally adjusted and annualised rate of 0, 7 per cent in the last quarter of 2001, but a gradual recovery is in progress with depleted inventories being rebuilt and international trade picking up. growth in the euro area in 2002 is projected to be lower than in 2001, but the economy is expected to gain momentum in the second half of this year, and reaching 2, 9 per cent in 2003. inflation in