which is within our control, such as focused, effective and efficient implementation of reforms and policies that will improve our competitiveness and enhance our attractiveness as an investment destination, labour representatives and employers taking full ownership and bis central bankers ’ speeches responsibility for restoring orderly industrial relations, and maintaining credible fiscal and monetary policies. in closing, may i be the first to congratulate all of you who have been nominated for this year ’ s awards. it is always gratifying and a special honour to have one ’ s hard work, efforts and contribution in your profession appreciated and recognised by peers in this manner. we thank you for your inspiration and leadership and for serving as an example to many of us. thank you. bis central bankers ’ speeches

during august 2013, it remains vulnerable to changes in the global and domestic environment. furthermore, while inflation expectations appear to be anchored and relatively stable, expectations are uncomfortably close to the upper end of the inflation target range. growth remains below potential with a widening output gap and is expected to average only 2. 0 per cent in 2013 and 3. 3 per cent in 2014. the leading indicator of the bank suggests that the moderate growth rates are set to continue, while protracted work stoppages in the mining and manufacturing sectors are likely to detract from growth going forward. consumer spending is also expected to remain modest, capped by high household debt levels, low employment creation and rising administered prices. more recently, concerns over the current account deficit have heightened, and these concerns have been propelled by the fact that south africa ’ s terms of trade have deteriorated, exports have failed to react sufficiently to the weaker rand, and the global environment characterised for the best part of five years by easy liquidity, is in the process of transforming. investors have shifted their focus to macroeconomic imbalances and have become increasingly concerned about countries with high current account and budget deficits, which rely heavily on international capital flows. along with monetary policy slowly turning the corner in advanced economies, a fundamental reassessment of the emerging market investment case appears to be under way, as the recent impact of the announcement of the intentions of the fed to soon embark on a withdrawal from unconventional monetary policy seems to have exposed vulnerabilities in certain countries that may have been underestimated previously. although the recent breach of the inflation target is expected to be temporary, and we recently saw cpi inflation decelerate from 6. 4 per cent in august to 6. 0 per cent in september, there are significant upside risks, not least of which relate to wages and the exchange rate. in line with its mandate, the bank continues to monitor developments carefully. indications that inflation will deteriorate significantly or remain outside of target for a protracted period and affect inflation expectations, will require the appropriate policy response from the mpc. as we approach 2014, while there appears to be reason for optimism overall as the global recovery gathers momentum, we will have to contend with an environment that continues to be characterised by uncertainty and volatility. the extent of the impact of the exit from unconventional monetary policy measures remains unclear. given the many uncertainties in the global environment that are beyond our control, there is little room to get wrong that