the past year and a half, owing to a mix of both domestic and external factors, which have impacted growth and inflation. the country currently faces a mix of subdued economic growth and relatively high inflation, with risks skewed to the upside. in part, but not exclusively, because of supply constraints, including a lengthy strike in the platinum mining sector and delays in the completion of new powergenerating capacity, real gdp has stagnated in the first half of the current year. real gdp contracted 0. 6 per cent in seasonally - adjusted, annualized terms in the first quarter, and this was barely reversed in the second quarter. on a year - on - year basis, growth has slowed to 1. 0 per cent in the second quarter, the lowest reading since south africa exited the recession at the end of 2009. at the same time, though, inflation has drifted gradually higher and breached the top end of the 3. 0 – 6. 0 per cent target range in april of this year. part of this overshoot reflected aboveaverage inflation for petrol and foodstuffs, some of which fortunately is already moderating or likely to moderate in light of lower international agricultural prices or improved domestic crops since the beginning of the year. nonetheless, underlying prices have also been picking up, and the bank ’ s preferred measure of core inflation ( excluding food, non - alcoholic beverages and petrol ) has climbed to 5. 8 per cent as of august 2014, following a sustained uptrend from a low of 3. 0 per cent in early 2011. while demand - driven price pressures remain largely absent, amid slowing final domestic demand growth and moderate expansion in credit to households, the marked and sustained depreciation in the rand ’ s exchange rate since early 2011 has clearly contributed to the upward trend in core consumer prices, which is of concern to the monetary policy committee. beyond the challenges posed by divergent trends in growth and inflation, the persistence of negative short - term real interest rates is not desirable from a longer - term perspective, as they could exacerbate existing, or generate new imbalances in the economy. beyond the well - known impact that negative interest rates can have on the allocation of financial resources to different sectors of the economy, or on the price of financial assets, it also important to point out their impact on the attractiveness of savings, especially in a country like south africa, where the low level of domestic savings remains a factor behind the elevated structural current

##1 and we host the third biggest funds jurisdiction in the world and the second biggest funds jurisdiction in europe2. global regulatory and supervisory standards are critical for effective oversight of the sector. this means we have very close financial relationships across the european union. we must lead and influence regulatory policy at both european and global levels. in this context, it gives me enormous pleasure to welcome european commissioner for financial stability, financial services and capital markets union, mairead mcguinness, who will be speaking shortly as the highlight of the evening. ireland and indeed europe is fortunate to have such a strong and influential leader at the helm of the financial services portfolio. in the uncertain and complex economic environment that has prevailed over the last few years, ireland's membership in the european union and its institutions has been a critical to the development of our economy and society. as we enter our sixth decade as a member of this union, i expect the bonds we have with our european peers to deepen further and the impact of our membership in the european union to continue to have a hugely positive impact on our economy and society. thank you for listening and i hope you will enjoy the discussion with commissioner mcguinness. i will now hand you over to the head of the european commission representation of ireland, barbara nolan to open proceedings. barbara, over to you. 1 insurance ireland 2 irish funds 2 / 2 bis - central bankers'speeches