prospects, which could result in a tightening of monetary policy and the stresses and strains of servicing that debt at a higher interest rate. and talking of deterioration in inflation prospects, the latest ber inflation expectations survey of course showed higher expected inflation than before. in the wake of oil price trends during the past year, this did not really come as a surprise. however, 25 months of cpix inflation within the 3 - to - 6 - per - cent target range has demonstrated that low and stable inflation can be achieved and remains a priority of economic policy. the monetary policy committee will not allow price shocks to develop into sustained inflation spirals, but will be vigilant, safeguarding the gains made in combating inflation. conclusion central banks combat inflation precisely in order to nurture economic and employment growth – balanced growth of the sustainable types. the south african reserve bank will certainly not neglect its duty in this regard. but let the debate continue. maybe in the process all of us will learn new lessons on how to do things in a nuanced manner. once again, thank you very much for affording us this opportunity to interact with such an august gathering of people interested in high economic growth and employment creation. thank you very much. 4 / 4

august last year. metals have also shown a strong increase with gold and platinum prices having increased by approximately 120 per cent over the same period. agricultural prices, by contrast, have displayed more volatility and less growth when compared to energy and metals. between 2001 and 2006, the imf commodity food price index increased by 36 per cent. more narrowly, and perhaps more relevant to south africa, the cereals price index increased by 48 per cent over the same period. in 2006 alone, the imf maize and wheat price indices increased by 24 per cent and 26 per cent respectively. food price inflation is becoming a world - wide concern and south africa has not been spared. spot prices of yellow and white maize have increased from levels of around r500 per ton in 2004 to current levels of around r1 800 per ton driven in part by international price developments. in october and november last year, meat prices increased at year - on - year rates of almost 20 per cent, and currently overall food inflation is in excess of 8 per cent per annum. 4. what has driven the recent price increases? it used to be the case that the growth cycle in the united states determined the commodity cycle. more recently, with the emergence of the asian economies and china in particular, the dominant influence of the us economy on the commodity cycle has waned. most commentators attribute the recent escalation of commodity prices to the increase in demand for raw materials by china in the wake of this country ’ s ongoing economic growth and industrialisation. two factors are frequently mentioned as part of the explanation of china ’ s impact on global commodity prices. firstly, china ’ s large population of over 1, 3 billion and the associated large pool of unskilled labour have contributed to increased competitiveness and has led to china being the leading manufacturing production centre of the world. this has in turn kept the demand for commodity inputs in manufacturing high. secondly, china ’ s industrialisation comes at a time of ongoing globalisation, which has contributed to overall demand for commodities globally. china ’ s contribution to global growth in the consumption of base metals in recent years has been considerable. according to the imf world economic outlook, between 2002 - 2005, china ’ s contribution to world consumption growth in aluminium, copper and steel was around 50 per cent. furthermore, china contributed in excess of 80 per cent to increased world demand for nickel and tin. more significantly, over the same period, china accounted for all the consumption growth in lead and