the exchange value of the rand. essentially driven by a slowdown in imported inflation at the time, the year - on - year rate of increase in the all - goods production price index slowed down from 10, 0 per cent in december 2000 to 7, 8 per cent in september 2001. it then accelerated sharply to 14, 1 per cent in march 2002 on account of the depreciation in the value of the rand and the related surge in the imported component of the production price index and in the prices of import - competing domestically - produced goods. to this account of inflation developments must also be added the fact that both the money supply and bank credit extension are rising at double - digit rates. as far as the money supply is concerned, the growth over twelve months in m3 accelerated from 17, 0 per cent in december 2001 to around 19 per cent in both january and february 2002, receding slightly to 18 per cent in march. financial market volatility contributed to the public's strong demand for monetary assets. finally, government's finances are healthy due to firm control over expenditure and continued buoyancy in tax collections. the national government's deficit before borrowing for 2001 / 02 amounted to some 1½ per cent of gdp, which indicates a high level of discipline. the non - financial public - sector borrowing requirement amounted to r11, 5 billion in fiscal 2000 / 01, or 1, 3 per cent of gross domestic product. the non - financial public - sector borrowing requirement in the first nine months of fiscal 2001 / 02 amounted to a surplus of r3, 4 billion, or 0, 5 per cent of gross domestic product. 8. conclusion in conclusion, it appears as that the slowdown in the global economy seems to have tapered off. the industrialised world, led by the united states, is experiencing vast improvements in economic conditions. this augurs well for economic prospects in the world economy. in general the emerging economies are expected to benefit from a resurgence in external demand. however, it is important to realise that there are some risks that threaten the pace and magnitude of the global recovery. the volatile geopolitical environment surrounding the oil market is one such risk. further, with the upturn in economic activity, it is to be expected that government spending that helped to make the recession short - lived will be curtailed. in addition, expansionary monetary policy that has been a characteristic of the last year will become more contractionary to keep inflationary pressures in check

in contrast to many of its peers, has failed to get much traction in the first half of 2017. after all, the end of the drought, together with the improving global environment and the recovery 5 for example, the consumer financial vulnerability index ( computed by the bureau of market research, the university of south africa, and momentum ) showed a significant deterioration in the second quarter of 2017. 6 organisation for economic co - operation and development 7 the oecd calculates export market growth for a specific country as the weighted average of import growth in its trading partners, with the shares of these partners in the country ’ s total exports as weights. page 5 of 11 in south africa ’ s terms of trade from the second quarter of 2016 onwards, was expected to engineer at least some economic rebound – but so far it is missing. most likely, the key to this lack of growth resides in a self - reinforcing ‘ negative feedback loop ’ of policy uncertainties, low private - sector confidence, subdued investment in productive capacities, and poor competitive performance. causality implications between growth and confidence go both ways. attempts by our in - house research to identify the possible causes of the ever - widening gap between south african and world growth have found that the negative impact of low confidence has increased in recent years, explaining as much as 1. 15 percentage points of that gap in 2016. in turn, weak business confidence amid disappointing demand performance has depressed private - sector fixed investment. last year, it contracted by 6. 8 %. as of the second quarter of 2017, it was down by 2. 7 % year on year and stood at 11. 8 % of gdp compared to a high of more than 15 % at the start of the global recession – its lowest level since 2004. in an environment of low consumer confidence and a lack of property price growth in real terms, the housing sector does not remain immune to such subdued performance. because of such softness in capital formation, as well as subdued productivity growth, the potential pace of gdp growth has slowed to an estimated 1. 1 % in both 2016 and 2017 from more than 3 % at the start of the decade. weak private - sector investment, currently focusing mostly on replacing obsolete capital rather than creating new capacities, coupled with a shortage of skilled labour and, possibly, product market rigidities, appears to be weighing on external competitiveness and export performance. south african firms may be slow to adjust to changes in global demand patterns ; they may lack the innovative edge