Indeed the experience of the crisis has prompted an even stronger assertion – that there is a tradeoff between price stability and financial stability, and that the more successful a central bank is with price stability, the more likely it is to imperil financial stability. The argument goes as follows.
For next year, that is calendar 2003, our forecast is for growth through the year of 3¾ per cent. The fact that it is higher than the current financial year rests importantly on the assumption that there is a recovery from the drought in the second half of the year, and that the world economic recovery gradually picks up momentum through the year.