a second fixed - line telephone operator, for example, seems set to increase competition and reduce communications costs. de - mothballing of power generating plants and the upgrading of power distribution networks, water - supply infrastructure, railway lines and rolling stock are all to be welcomed. while our main airports currently seem to cope well, projected further increases in passenger numbers and freight volumes necessitate further expansion. the cluster of industries linked to infrastructure is evidently going to experience buoyant times in the coming years. the accompanying imports of machinery and equipment might, of course, initially widen the deficit on the current account of our balance of payments. however, foreign finance usually accompanies such imports, and later on the improved infrastructure is likely to boost exports as the supply side of our economy is streamlined. a particularly sensitive area is that of land reform. patterns of land ownership which have evolved over time are not sustainable, and need to change. however, great care needs to be taken in this process. what south africa cannot afford is the kind of reform where agricultural land which is being used productively is purchased with taxpayers'money, transferred, and ends up being used far less productively than before, subtracting from the country's output 3 / 5 and destroying job opportunities. farming is a modern business requiring specialised skills as well as financial capital. adequate attention has to be paid to the training of newly empowered farmers, advisory services, and financial support for a limited period. success in improving growth and creating jobs hinges critically on appropriate skills development. this does not require throwing money at the problem, but aligning the system of education and training to the requirements of a modern economy. agriculture's share in total value added in the economy has dwindled from 7, 7 per cent in 1975 to 3, 4 per cent last year, and that of mining from 11, 1 per cent to 7, 1 per cent over the same period. construction's share fell from 5, 1 per cent in 1975 to 2, 4 per cent in 2004 ( but this should, of course, rise as infrastructure spending gets underway ). at the other extreme, the share of the finance, real - estate and business services sector in the economy grew from 12, 5 per cent in 1975 to 20, 1 per cent last year, and that of community, social and personal services from 16, 1 per cent to 21, 0 per cent over the same period. product lines and production processes within the various sub -

categories such as restaurants and hotels as well as public transport rising significantly. other key services components such as insurance and housing inflation are starting to normalise from their recent lows, with insurance inflation averaging 6. 4 % in the recent outcome ( february ) compared to 3. 1 % at the same time in the previous year. inflation expectations, which have increased and remained above the target midpoint, are also key to the overall evolution of services inflation. they largely characterise wage negotiations and ultimately inform price formation in the economy. monetary policy going forward in light of all this, the sarb has often been asked : what is your view on economic growth and what is your forecast for inflation? these are important questions for any central bank and we find ourselves faced with an important conundrum, that is, juggling high inflation against low growth. like many of our global peers, we are cognisant of weak growth prospects. our gross domestic product ( gdp ) projection for 2023 is 0. 2 %, on the back of the electricity supply deficit. by contrast, inflation remains elevated. our primary goal as a central 3 / 4 bis - central bankers'speeches bank is to anchor inflation expectations and to reduce the extent to which higher inflation does spill over into pricing behaviour in the following year. our role as central banks is to keep inflation expectations anchored to prevent wage spirals from generating permanently higher inflation. as discussed at our monetary policy committee ( mpc ) meeting held at the end of march, the balance of risks to the inflation outlook are assessed to be on the upside. as we have conveyed on several platforms, we believe that we have taken the right decisions over the past few mpc cycles to ensure that we get inflation back to the midpoint of the target range, but this cannot preclude further steps if inflation and inflation expectations continue to surprise higher. at this stage, we do not know what the terminal interest rate level will be, but we hope that the way in which we explain our policy creates confidence that future inflation will come back to target. we continue to monitor data and developments and we stand ready to act, as and when warranted. concluding remarks in conclusion, i think many of us will agree that the emerging financial vulnerabilities are introducing new headwinds for global financial markets. as such, global conditions are likely to remain volatile in the near term, with tightening financial conditions in the us as new weaknesses in financial institutions emerge and concerns of contag