levels reached during the second half of the 1990s, although it may have edged down just a bit over the last few years. a final factor impacting the inflation outlook is the degree of slack in the labor market. right now, the unemployment rate is relatively low : at 5 percent it ’ s near most estimates of the so - called natural rate. but other measures — such as the employment - population ratio, a survey of job market perceptions, and industrial capacity utilization — suggest that some slack still remains. risks to economic growth and employment now let me turn to the real side of the economy — growth and employment — and highlight some of the risks that affect my optimistic baseline projection. even though overall growth has been respectable, economic activity has been burdened by some major drags over the past year or so. three major ones result from the oil price shock, the deterioration of the trade balance, and a still relatively low level of business investment spending. as i mentioned, the price of oil has just about doubled over the past two years. typically, the markets view oil price jumps as temporary. but this time around, far - dated oil futures prices also have increased sharply, suggesting that the high prices may be here to stay. this is a highly unusual development. most likely, it reflects the perception that there is little excess supply of oil available in the world and that global demand is likely to remain strong. the perception that the oil price shock is more permanent tends to intensify its negative effect on spending. estimates suggest that the oil price shock has noticeably restrained real gdp growth — by about three quarters of a percentage point in 2005. this impact is certainly nontrivial. however, it is worth emphasizing that the recent price change and spending impacts are far smaller than those of the oil shocks in the 1970s. the u. s. trade deficit, as we all know very well, has been growing rapidly for years. by the end of last year, it topped five and three - quarters percent of gdp, a new record. two of the major factors contributing to the sizable imbalance between our imports and our exports are the strength of the u. s. economy relative to our major trading partners and the relative strength of the dollar. in 2004, the increase in the trade deficit — by itself — subtracted almost one percentage point from real gdp growth, representing a significant drag on overall activity. finally, while business investment in equipment and software rose strongly last year, by almost 14 percent, the

to the community at large. microfinance acts as a bridge for women to be able to turn their dreams into reality. i know many of you have personally felt and lived this welcome change. microfinance to support these developments ladies and gentlemen, financial inclusion, which includes microfinance, has been acknowledged the world over as being critical to lifting the living standards of people and addressing poverty. financial inclusion is all about the availability of safe savings, bis central bankers ’ speeches appropriately designed loans and appropriate insurance and payment services, all designed for the poor and low income households. financial inclusion is about empowering or helping people to help themselves to increase their income, acquire capital, manage risk and work their way out of poverty and into a better life. according to the 2008 – 2009 household income and expenditure survey for fiji, there has been a large increase in the number of self - employed women in our country. data indicate these women represented 24 percent of total self - employed in 2008, up from 16 percent in 2002. i would expect the numbers to have increased even further with the advent of spbd fiji and your participation over the past 12 months. these numbers are surely a positive sign, indicating that recent initiatives to encourage and support women in self - employment are clearly bearing fruit. to all micro - entrepreneurs present here today and to those who are interested in starting up a micro business, please remember that microfinance is not only about receiving loans. it is much more than that. it is also about savings. therefore, it is very important that you make wise decisions while using the funds that are made available to you. i encourage you to take heed of the financial literacy training that is disseminated to you by the company. saving a dollar today, and whenever you can, will go a long way. starting your own business is the very first step. ensuring that you expand this business is also very critical for a sustained flow of income. using the revenue from your own business to put food on your table and to educate your children are the building blocks for a prosperous nation. microfinance is a platform that has provided you with an opportunity to do just that. development in financial inclusion and microfinance ladies and gentleman, as you may be aware, in 2009 a national microfinance workshop was organized by the reserve bank and supported by the pacific financial inclusion programme ( pfip ). a key outcome at this workshop was the commitment by all the participants to a common vision