and oecd are looking more encouraging than just a few months ago. how permanent this improvement is, however, remains to be seen. caution is warranted, nonetheless, as temporary monetary and fiscal stimulus measures may be providing a false sense of security. as for south africa, although growth continued to contract in the second quarter of this year, the pace of contraction slowed from - 6, 4 per cent in the first quarter to - 3, 1 per cent in the second quarter. the manufacturing sector appears to be turning the corner ; the purchasing manager ’ s index seems to be steadily climbing back towards the 50 threshold. businesses and consumers are also more optimistic as reflected by the confidence indices. the composite leading indicator of the south african reserve bank has been increasing during the last three, indicating that a recovery can be expected by the end of the year. 8. conclusion in conclusion, there are encouraging signs that the global slowdown may have reached its lower turning point. there remains a high degree of uncertainty attached to the speed and extent of the recovery, however, the swift manner in which authorities reacted have certainly borne fruit. developments in the south african economy are very much influenced by global economic developments. while we lagged on the way down, it is likely that we will lag on the way up. taking cognisance of the global financial and economic environment, and domestic developments with regard to growth, monetary policy will remain primarily focused on inflation management. thank you.

##ulism and elected politicians are increasingly turning to protectionist policies as a solution. unfortunately, trade wars and protectionism are not the panacea some believe them to be. the imf has estimated that the current and threatened united states ( us ) china tariffs could cut the global gross domestic product ( gdp ) in 2020 by 0. 5 % – or about us $ 455 billion. to put this into perspective, the estimated loss is larger than south africa ’ s annual economic output. 1 1 financial times, ‘ lagarde warns of trade war ’ s “ self - inflicted wounds ” ’, 5 june 2019 page 2 of 7 we are already seeing the impact of trade tensions reflected in weaker trade volumes, declining investment levels, and worsening investor sentiment. the manufacturing sectors in the organisation for economic co - operation and development ( oecd ) countries, which have strong links to the global value chain, have been significantly influenced by the recent tariff measures. in addition, uncertainty around future trade developments is expected to reduce oecd ’ s business investment growth from 3. 5 % in 2017 / 18 to around 1. 7 % in 2019 / 20. as long as these trade tensions persist, the downside risks to global growth will increase. before more damage is done, a more integrated, cooperative and coordinated approach is required, incorporating the principles of multilateralism. protectionist and isolationist approaches to dealing with global challenges will simply not take us very far. in october last year, imf managing director christine lagarde called for a ‘ new multilateralism ’ – one that is dedicated to improving the lives of all citizens, one that ensures that the economic benefits of globalisation are shared much more broadly, and one that focuses on accountable governments and institutions that work together for the common good. this ‘ new multilateralism ’ is key to providing the foundation for global cooperation to tackle the many transnational challenges, including managing the risks related to, among other things, climate change, cybercrime, increasing conflict and refugee flows, failures of governance, and illicit finance flows. an essential component of global cooperation relates to the global financial safety net ( gfsn ). today, the gfsn includes international reserves, bilateral swap lines, regional financing arrangements, imf resources and market - based instruments. while the size of the gfsn is larger than it was before the global financial crisis, the adequacy and coverage of the gfsn as well as