vital going forward in directing markets and ensuring that withdrawal symptoms are kept to a minimum. however, the very volatile and uncertain environment itself does present communication challenges. the south african reserve bank is committed to transparent monetary policy communication. at the conclusion of every mpc meeting, a statement is issued through a press conference chaired by the governor, with all mpc members in attendance, to explain the monetary policy stance. the monetary policy statements, speeches by the governors and senior officials as well as publications such as the monetary policy review identify and discuss the balance of risks around our central forecasts in such a way that market participants and other stakeholders are in a reasonable position to form a view about our possible reaction to changing circumstances. 4. economic outlook as i draw to a conclusion, let me now very briefly turn to the economic outlook for south africa. south africa ’ s growth outlook is inextricably linked to the global outlook. although the recovery is somewhat stronger in certain regions, overall global growth prospects remain broadly on the downside. the extraordinary challenge facing policy makers globally is how to roll - out an ambitious programme of ensuring that the global recovery is sustainable and can gain momentum, by simultaneously implementing various initiatives while ensuring that they don ’ t conflict with each other. there is a need to support growth in the near - term, while also implementing credible medium - term fiscal policies, there is a need to continue the repair work to banking systems by pressing ahead with regulatory reform, which in some instances requires further deleveraging, but at the same time credit needs to flow to ensure that the abundant liquidity made available by central banks actually gets transmitted into the real economy. alongside all these, structural reform needs to be progressed in a growth - friendly way to give us a better foundation for the future. against the backdrop of a still difficult international environment affecting our major trading partners, as well as domestic challenges, at the time of the last mpc meeting the bank revised lower its forecast for 2013 growth from 2. 4 per cent to 2. 0 per cent, while that for 2014 was revised from 3. 5 per cent to 3. 3 per cent. at the same time the bank announced an adjusted cpi forecast, and expected inflation to average slightly higher at 5. 9 per cent for 2013 and 5. 5 per cent for 2014, with a temporary breach of the inflation target range during this quarter ( q3 / 2013 ). as we have indicated before, the challenge remains how best to manage upside inflation risks

dissaving by government was equal to 3. 1 per cent, and the budget deficit equal to 5. 6 per cent of gross domestic product. the deficit for the current fiscal year is expected to be reduced to 4. 0 per cent of gross domestic product. the government also made an important contribution to the official foreign reserves of the country by way of two bond issues in international capital markets during june 1997. the total proceeds from these two loans amounted to r3. 8 billion. a few smaller and one major privatisation transaction – the sale of an equity stake of 30 per cent in telkom – raised more than r6 billion over the past year. part of these funds was used to contain total government debt to a level of about 56 per cent of gross domestic product. the better harmonisation of monetary and fiscal policies over the past year made a major contribution to the success achieved with the objective of restoring overall financial stability after the foreign exchange market disruption of february last year. financial co - operation in southern africa the committee of governors of the central banks of the twelve members of the southern african development community ( sadc ) met twice during the past twelve months to discuss matters of financial co - operation. the secretariat of the committee within the reserve bank has made good progress in the compilation of a computerised data base of financial statistics of the region and information on the functions and responsibilities of the twelve participating central banks. officials from all the central banks participated in a number of courses presented by the reserve bank ’ s training institute, and a course was again presented for bank regulators and supervisors in the east and southern africa banking supervisors group ( esaf ). a special study is being undertaken with the support of the world bank on the development of national payment and clearing systems with a view to the eventual establishment of a cross - border payment and settlement system for all sadc countries. over the next year, the co - ordination of financial co - operation in the region will be extended also to include the activities of commercial ( private ) banks and stock exchanges. a need for more flexible monetary policy operations developments over the past year revealed a need for greater flexibility in the market for short - term funds. the transformation in the south african financial markets since 1994, and in particular the further integration into the global financial system, will in future require more prompt action and decisive direction for movements in financial asset prices, interest rates and exchange rates. part of the explanation for the rigidities in the south african money market lies