be done by an eu member state that is not yet member of the euro area. from the central bank perspective this involves : ( i ) a sound banking sector ; ( ii ) fiscal consolidation ; and ( iii ) structural reforms. good progress has been made in bulgaria with regard to the first two areas. a comprehensive asset quality review in 2016 helped restore confidence in the banking sector. bank lending is recovering, the overall profit is near historical highs and a process of market - based consolidation in the sector is underway, including a recent deal with a strategic investor from the euro area. furthermore, the public finances of bulgaria remain sound and the successful fiscal consolidation is illustrated by the budget surplus last year and the third lowest government debt to gdp ratio in the eu. as for the structural reform agenda, much more remains to be done in order to resolve remaining issues and help attract increased capital flows from the eu. 1 / 2 bis central bankers'speeches we at the central bank have already planned the next steps, which will build on recent progress. among other things, we plan to further strengthen our banking supervision, develop the crisis management framework for the banking sector, and reduce the level of nonperforming loans. to conclude, decisive actions are required at both the eu and national levels to address the current saving - investment mismatches within the eu. while expending the available toolkit is important, priority should be given to resolving the remaining underlying issues with regard to banking and financial integration, real convergence, and quality of project management. 2 / 2 bis central bankers'speeches

##appling with persistently high inflation. south africa has experienced a sustained inflation target breach, with headline inflation having remained above the midpoint of the target range for 27 consecutive months since may 2021. high inflation erodes the purchasing power of the rand and thus makes south africans poorer. over the past 18 months, south africans, alongside their global counterparts, have endured a rise in the cost of living. this came at a time when south africans had become accustomed to low and stable inflation. after hovering in the upper half of the target range for a year, south africa ’ s inflation breached the upper limit of the sarb ’ s 3 ‒ 6 % inflation target range in may 2022, and reaching a high of 7. 8 % in july 2022 before beginning its retreat. the trajectory of domestic headline inflation has been shaped primarily by fuel, food and electricity 5 this presents risks of wage - price spirals, particularly given demand resilience. prices. the first two have largely reflected global developments, beginning with the sharp rebound in the demand for goods amid supply bottlenecks, and later exacerbated by the russia ‒ ukraine war, which further strained global energy and food markets. sharply rising food and fuel prices raise fundamental concerns from a distributional standpoint. to provide some perspective, fuel inflation in south africa soared to 56. 2 % in july 2022, and pushed pump prices well above r25 per litre, with immediate knockon effects on transport and production costs for goods and services. 6 meanwhile, high electricity tariffs have further raised the cost of living for many south africans. food and transport inflation impact the poor the most, as their consumption baskets are weighted heavily by these items. recent inflation data by statistics south africa shows inflation for the lowest income deciles ( deciles 1 and 2 ) averaging 9. 0 % in july 2023, while that for income deciles 9 and 10 averaged at 4. 3 %. 7 low - income earners and the poor more generally are less able to protect their incomes from being eroded by inflation, and this contributes to rising inequality in our society. the authors of our constitution understood the need to protect those who cannot protect themselves. the constitution tasks the sarb with protecting the purchasing power of the rand, and we are committed to executing on this mandate. in light of the deteriorating domestic inflation environment, the sarb ’ s monetary policy committee ( mpc ) raised the repurchase ( repo ) rate by a