advanced countries ( aes ) is notably weaker and the same can also be said for the emerging market economies ( emes ), with the exception of emerging asia. for some time, the global recovery has been underpinned by the performance in emerging markets with the expectation that the global growth momentum will gain traction as the pace of recovery in advanced countries picked up. unfortunately, these expectations have not been fully realised. emerging market economies, which currently make up around 58 percent of global gross domestic product ( gdp ), still continue to account for a significant portion of world growth. however, the economic performance across emerging markets as a whole is uneven and generally weaker. with the exception of india, most major emerging market economies have had disappointing growth outcomes as depicted by the recent recessions in brazil and russia and the slowdown in china. bis central bankers ’ speeches of concern, is that the global recovery is not only weaker, but that the deterioration in the global environment over the last year has been accompanied by greater downside risks. the drop in commodity prices, uncertainty in financial markets, volatile capital flows, subdued external demand and geopolitical influences, coupled with the refugee crisis, have been some of the major headwinds adversely impacting global economic developments. unfortunately, these factors will continue to have a bearing on the economic outlook for both emerging market economies and the global economy as a whole. given the globalised nature of emes – south africa included – this implies that international influences, although of an exogenous nature, will form an integral part of the policy landscape in emerging economies. global inflation pressures remain subdued with both current and projected inflation rates below target in most advanced economies. these developments, combined with below potential growth have prompted expansionary monetary policies in a number of advanced economies, which are very likely to persist over the forecast horizon. in contrast, inflationary pressures have been rising in a number of emerging economies, mainly on account of currency depreciation rather than as a result of rising international price pressures. south african inflation outcomes have also been subjected to more prominent exchange rate pressures recently, an issue i will come back to later on. so in general, global inflation remains at modest and subdued levels and, with oil prices projected to remain at low levels, international cost pressures are unlikely to pose a major risk to inflation outcomes across the globe. south africa ’ s economic outcomes and outlook recent indicators show that real economic growth in south africa slowed marginally to an annualised rate of 0

remarks by daniel mminele, deputy governor of the south african reserve bank, at the annual financial markets department cocktail function pretoria 4 april 2017 good evening, ladies and gentlemen. it is once again that time of the year when we welcome you all to the annual cocktail function of the financial markets department of the south african reserve bank ( sarb ). thank you for accepting our invitation and joining us tonight. introduction as you are aware, the main idea behind this function is to create a networking opportunity between sarb staff members and other market participants in order to facilitate an exchange of views on financial market developments in a more relaxed environment. this annual event also provides an opportunity for us as the central bank to convey our appreciation for the cooperation we have been receiving from market participants over the past year, both in the execution of open market operations and when we conduct financial markets research to enhance our understanding of market dynamics. these interactions are crucial for our role in the financial markets as we seek to give effect to the monetary policy stance which underpins the execution of our price stability mandate. page 1 of 9 my colleagues in the financial markets department remind me every year that this is not the occasion to deliver my ‘ speech of the year ’ but that i am merely a curtainraiser to the main event, namely conducting ‘ special ’ liquidity management operations. in welcoming you to the sarb, allow me to make a few remarks to take stock of the recent developments in international and domestic financial markets and their implications, last year ’ s cocktail function being the reference point. before i conclude i would also like to touch briefly on market conduct issues. i will try and heed the advice that franklin d. roosevelt once gave : “ be sincere, be brief, be seated. ” developments in global financial markets since the previous cocktail function, policy uncertainty has come to dominate price action in global financial markets. among other things, this is due to what marvin barth has called the ‘ politics of rage ’ 1, referring to the rise in anti - globalisation sentiment, populist rhetoric, and countries increasingly turning inward. while an element of this uncertainty may have diminished, at least as far as the election outcomes in certain parts of the world are concerned, the outcomes themselves have ushered in a period of unusually high levels of uncertainty as regards policy direction, the timing with regard to the adoption of policies as well as the likelihood of successful implementation. the risks stemming from the possible election outcomes across europe this year appear to be