global output growth. indeed as the impact of the euro area sovereign debt crisis worsened, the forecast for global output for 2012 was reduced from 3. 8 percent to 3. 3 percent. furthermore, despite recent encouraging indicators, the pace of economic recovery in the us continues to be constrained by failure to agree on the necessary fiscal policy measures. in contrast, economic activity in emerging market economies is expected to remain buoyant, particularly in china and india, although these countries ’ economies are also vulnerable to any major global economic slowdown. the forecast overall slow global economic expansion clouds prospects for trade ; it also reduces the threat of inflation in emerging market economies, and dampens the impact of an increase in commodity and food prices. therefore, although there are underlying inflation pressures in emerging market countries due to relatively buoyant economic activity, overall global inflation is projected to decline from 4. 6 percent in 2011 to 3. 4 percent in 2012. as a result, monetary policy is expected to be generally accommodative in these countries. with respect to sdr countries, inflation is forecast to decline from 2. 9 percent in 2011 to 1. 8 percent this year. in south africa, headline inflation is projected to increase only slightly, from about 5 percent in 2011 to 5. 8 percent. all in all, it is expected that the effect of external price developments on domestic inflation will be negligible. given that the bank ’ s medium - term inflation objective range is still 3 – 6 percent, and the forecast average inflation range for trading partner countries is 3 – 5 percent, it follows that the nominal effective exchange rate will crawl down only minimally in 2012, in order to stabilise the real effective exchange rate. this will continue to support international competitiveness of domestic industries, as a contribution to economic diversification. moderate output expansion is projected for the domestic economy, with non – mining output remaining below potential. mining production is expected to be maintained at current levels, although this is subject to sustained global demand. there are expectations that, in the course of the year, some new mining ventures could commence operations and, if that were to be the case, there would be a boost to total mining output. however, non - mining sector performance could be weighed down by the limited domestic fiscal stimulus, as nominal government expenditure is only budgeted to increase marginally ( 0. 1 percent ) in 2012 / 13 and nominal personal incomes will continue to be sluggish. this outlook was also

monthly earnings for all employees are, therefore, estimated to have increased by 8 percent or p504 between the fourth quarter of 2021 and the fourth quarter of 2022. in this regard, the average growth in monthly wages is less than the inflation rate and, hence, does not add to inflationary pressures. ( f ) 3. 20 credit and financial stability review annual growth in commercial bank credit accelerated to 6. 2 percent in 2022, from 5. 1 percent in 2021 ( chart 3. 8 ). the faster growth in commercial bank credit was, in part, associated with the increase in loan uptake by businesses in the period under review, as the economy opened, following the end of the state of public emergency monetary policy statement february 2023 in september 2021. the impact of the increase in the mopr was countered by the utilisation of credit facilities by businesses aiming to increase activity or augment inventory / supply shortages in order to meet demand, during the continued recovery following relaxation of the covid - 19 restrictive measures. business sector credit grew, annually, by 8. 9 percent in 2022, from 2. 7 percent increase in december 2021. meanwhile, credit to businesses excluding parastatals increased by 9. 2 percent during 2022, compared to an annual expansion of 4. 1 percent in 2021. the improvement in the allocation of credit to businesses was in the form of utilisation of overdraft facilities and loans extended to some companies in the agriculture, electricity and water, mining, transport and communication, as well as in real estate industries. furthermore, there was increased use of credit facilities by parastatals ( chart 3. 9 ). chart 3. 8 : commercial bank credit annual growth rates ( january 2016 - december 2022 ) percent - 10 mar may jul sep nov mar may jul sep nov mar may jul sep nov mar may jul sep nov mar may jul sep nov mar may jul sep nov mar may jul sep nov - 5 total credit house credit business credit source : commercial banks. chart 3. 9 : annual growth of commercial bank business credit by industry tr an sp or t & es, r de ta es al re at st ra pa te als e nc fi na nd ta an ur ta tr a el - 50 ba rs co m m un ica tio ns io n tru co ns w at & y cit ec tri ct er g tu ac uf an m - 30 rin g in in m ag