hp trend and flexprice output respectively, seasonally - adjusted data gdp gap flexprice gap - 1 - 1 - 2 - 2 - 3 - 3 - 4 - 4 - 5 - 5 note. trend calculated using the hodrick - prescott filter. flexprice gap calculated using the riksbank ’ s macro model ram ses. broken lines refer to the riksbank's forecasts. sources : statistics sweden and the riksbank figure 3. employment and unemployment per cent, seasonally - adjusted data employment rate ( left scale ) unemployment ages 16 - 64 ( right scale ) unemployment ages 15 - 74 ( right scale ) note. broken lines refer to the riksbank's forecasts. sources : statistics sweden and the riksbank figure 4. labour market gaps percentage deviation from hp trend, seasonally - adjusted data hours worked gap employment gap - 1 - 1 - 2 - 2 - 3 - 3 - 4 - 4 - 5 - 5 note. trend calculated using the hodrick - prescott filter. broken lines refer to the riksbank's forecasts. sources : statistics sweden and the riksbank figure 5. capacity utilisation in industry index and percentage deviation from hp trend respectively, seasonally - adjusted data - 1 - 2 - 3 statistics sweden, actual capacity utilisation in industry ( left scale ) nier, current capacity utilisation in manufacturing industry ( left scale ) gdp gap ( right scale ) - 4 - 5 note. trend calculated using the hodrick - prescott filter. broken lines refer to the riksbank's forecasts. sources : national institute of economic research, statistics sweden and the riksbank figure 6. resource utilisation indicator index and percentage deviation from hp trend respectively, seasonally - adjusted data - 1 - 1 - 2 - 2 resource utilisation indicator hours worked gap employment gap gdp gap - 3 - 4 - 3 - 4 - 5 - 5 note. trend calculated using the hodrick - prescott filter. the standard deviation of the resource utilisation indicator is normalised to that of the gdp gap. broken lines refer to the riksbank's forecasts. sources : statistics sweden and the riksbank

an address by fundi tshazibana, deputy governor of the south african reserve bank ( sarb ), at the nedgroup investments 11th annual treasurers ’ conference central banking in an era of stagflation risk : a view from the mpc 25 august 2022 introduction good afternoon and thank you for the invitation to address you today. nowadays it feels very strange to be in front of a live audience, instead of a screen. three years ago, when i spoke at this conference, the world was a different place. when the covid - 19 crisis started, we all said that everything was different. two years later, everything is different again. trying to figure out these ‘ new differents ’ certainly feels like i ’ m lost in the multiverse or my daughter ’ s version of the ‘ upside - down world ’. in october 2021, wordle took the world by storm as people tried to guess the letters that made up the 5 - letter word of the day. the most popular game back in 2020 was also about letters … specifically which letter shape would describe the economic recovery. o would it be a v - shape, with a quick downturn and equally quick rebound? o an l - shape, with a collapse to a persistently lower level of output? o or a k - shape, with a recovery for the rich and an ongoing recession for the poor? everyone had their favourite letter. despite all the imagination that went into crafting these scenarios, i don ’ t recall anyone warning of global stagflation. but nowadays, everyone is worried about that toxic mix of high inflation and weak growth. i ’ m not sure what letter could have denoted this outcome. page - 1 - of 8 the journey since 2020 so how did we get here? and where are we going? advanced economies went into the covid - 19 crisis on the back of a decade of subdued growth and below - target inflation. central bankers invested heavily in strategies to deal with the zero lower bound on interest rates to avoid getting stuck in japan - style ‘ lowflation ’. worries about high inflation were often considered as dated and alarmist. this was particularly the case in the united states. new fiscal thinking also emphasised taking advantage of interest rates that were low relative to growth rates. all of this suggested that macroeconomic stability was secure and there was ample scope for aggressive policy action to manage the covid - 19 crisis. in emerging markets, the situation looked very different. few