in contrast to many of its peers, has failed to get much traction in the first half of 2017. after all, the end of the drought, together with the improving global environment and the recovery 5 for example, the consumer financial vulnerability index ( computed by the bureau of market research, the university of south africa, and momentum ) showed a significant deterioration in the second quarter of 2017. 6 organisation for economic co - operation and development 7 the oecd calculates export market growth for a specific country as the weighted average of import growth in its trading partners, with the shares of these partners in the country ’ s total exports as weights. page 5 of 11 in south africa ’ s terms of trade from the second quarter of 2016 onwards, was expected to engineer at least some economic rebound – but so far it is missing. most likely, the key to this lack of growth resides in a self - reinforcing ‘ negative feedback loop ’ of policy uncertainties, low private - sector confidence, subdued investment in productive capacities, and poor competitive performance. causality implications between growth and confidence go both ways. attempts by our in - house research to identify the possible causes of the ever - widening gap between south african and world growth have found that the negative impact of low confidence has increased in recent years, explaining as much as 1. 15 percentage points of that gap in 2016. in turn, weak business confidence amid disappointing demand performance has depressed private - sector fixed investment. last year, it contracted by 6. 8 %. as of the second quarter of 2017, it was down by 2. 7 % year on year and stood at 11. 8 % of gdp compared to a high of more than 15 % at the start of the global recession – its lowest level since 2004. in an environment of low consumer confidence and a lack of property price growth in real terms, the housing sector does not remain immune to such subdued performance. because of such softness in capital formation, as well as subdued productivity growth, the potential pace of gdp growth has slowed to an estimated 1. 1 % in both 2016 and 2017 from more than 3 % at the start of the decade. weak private - sector investment, currently focusing mostly on replacing obsolete capital rather than creating new capacities, coupled with a shortage of skilled labour and, possibly, product market rigidities, appears to be weighing on external competitiveness and export performance. south african firms may be slow to adjust to changes in global demand patterns ; they may lack the innovative edge

programme, through its conferences and seminars, has been well - focused and continues to provide valuable opportunities for industry issues to be debated. we in south africa are particularly delighted that next year ’ s conference is to be held in our country and we look forward to welcoming you to a decent climate and outstanding wines. we regard your visit as good practice for hosting the soccer world cup in 2010 - though we hope it will be a somewhat less intimidating experience. looking back over the past year or so, there have been some notable developments in the gold market. i want to touch on just two. first, the news in april that nm rothschild were withdrawing from gold trading marked a sad moment in the long history of the london market. that they chaired the london gold fixing for 85 years, continuously from its inception from 1919, may not, i suppose, be entirely in line with modern - day precepts of corporate governance, but it represents a long - running commitment to promoting the quality and international reach of the london market which has played an important part in maintaining its pre - eminence. we all owe a great debt of gratitude to the house of rothschild and i want tonight to pay unreserved tribute to the contribution they have made over the years. the market, nonetheless, will continue, and i was delighted to see the decision to move to conducting the fixing by telephone, which i believe was the means by which it was originally conducted in 1919 before moving to more gracious surroundings at rothschilds. this is a delicious illustration of the paradox, of which i have become increasingly aware, that part of the process by which we edge our way into the future is by inadvertently re - inventing the past. the other notable event to which i want to allude is the renewal from last month of the central bank gold agreement. though widely expected, this is welcome evidence of the continuing ability of central banks to work together to align their interests and those of the markets in a sensible arrangement for orderly marketing. the lbma ’ s input to this process, through its survey of the views of market participants, was well - timed and helpful. there are, of course, plenty of other fields where we, as central banks, and our governments need to show a similar dedication to international good order in addressing potential imbalances. elsewhere, of course, the market has continued to digest significant shifts in the trading environment. earlier this year, prices reached a 15 - year high, and are now again close to