, core inflation has remained rather sticky. this is the case with labourintensive services in advanced economies, against a background of still - tight labour markets. nonetheless, services inflation is now falling in most countries. favourable base effects in energy, food and the unwinding of supply chain bottlenecks have also tempered price increases in other consumer price index ( cpi ) components. furthermore, longer - term inflation expectations, at least in major advanced economies, have remained reasonably well anchored, a testimony to central banks retaining their credibility. as a result, the monetary policy tightening episode appears largely complete. while central banks maintain vigilance against persistently high inflation, they demonstrate rising evidence of the transmission of earlier rate hikes to financial conditions and credit demand. consequently, financial markets now see no probability of an additional hike in the united states ( us ) or eurozone. in the emerging economies, some of those central banks which had acted early and proactively to deal with inflation now have the flexibility to consider rate cuts. another encouraging development is that disinflation is occurring alongside the surprising resilience of the global economy. the imf ’ s october world economic outlook estimates that global growth will only slow to 3. 0 % this year, from 3. 5 % in 2022. in addition, bloomberg consensus of economists now also expects world growth see ‘ inflation : a look under the hood ’, bank of international settlements, annual economic report 2022. of 2. 8 % in 2023, up from only 2. 1 % projected at the beginning of the year. in advanced economies, most private sector balance sheets were solid at the time when monetary policy was tightened. cash buffers supported private spending, while in the us, corporate borrowers had ‘ locked in ’ low - cost medium - term financing when interest rates were at historic lows. this delayed the impact of higher rates on demand. cross - border capital flows, while weak by historical standards over the past few quarters, have nonetheless displayed equal resilience in 2022 ‒ 23, considering the size of the repricing in advanced economies ’ bond markets, usually a “ bellwether ” for global investor risk appetite. over the past 12 months, portfolio flows to emerging markets over the past 12 months are only a 0. 3 standard deviation below their average of the past 10 years. 2 this is good news, considering that the 10 - year us treasury yields have risen by about 300 basis points since the beginning

foreign exchange losses. many countries in the ssa region tend to suffer from ‘ twin deficits ’ ( fiscal and external ) which raise the cost of debt servicing and refinancing at a time when global investors are more risk - averse, and more sensitive to deteriorating fiscal dynamics. according to the imf, over half of the ssa countries are either at a high risk of debt distress or already in debt distress. 10 no country in the region has been issuing eurobonds since april 2022, suggesting that the refinancing of external debt could be particularly challenging in the next few years. finally, economic performance in the ssa region remains uneven, and generally falls short of the performance seen two decades ago ‒ a period when investment in the region increased steadily. south africa is one of the laggards in the region – the sarb only expects growth to accelerate to 1. 0 % in 2024 amid continued constraints from insufficient electricity production and inefficient transport networks. other cma countries also look set to fall short of the regional average. more generally, the imf notes a tendency for resource - intensive economies to underperform, highlighting the lingering problem of the ssa ’ s insufficient downstream integration into value chains. see international monetary fund, ‘ geoeconomic fragmentation : sub - saharan africa caught between the fault lines ’, regional economic outlook : sub - saharan africa analytical note, april 2023. international monetary fund, regional economic outlook : sub - saharan africa, october 2023. how policy can best respond in response to these global challenges and regional vulnerabilities i have described, policymakers in our region, including us central bankers, still have work to do. here is a list of the issues we should consider : • policy response is not for central banks alone • structural reforms are unavoidable • controlling inflation is not negotiable • close supervision of banks and non - banks is a must • and a credibility fiscal path is not only a necessary for fiscal sustainability but to bolster confidence, ensure financial stability to give some breathing room to monetary authorities high and volatile inflation discourages external capital inflows. it also discourages domestic fixed investment, erodes the purchasing power of the more vulnerable in society, and generally leads to a sup - optimal allocation of resources. this makes it essential for central banks to ensure that inflation returns swiftly to target, even when the causes of deviation are due to external factors, domestic supply shocks