In turn, that 2.5% is made up of half a percentage point which reflects the global real rate, which we derive from the longer-run real policy rate of the US, the euro area and Japan, plus 2 percentage points for the South African risk premium. As with potential growth, we cannot be sure that the neutral rate is exactly 7%.
1  Most empirical results that find ageing is disinflationary have focused on Japan, as its transition from aging society to aged society is one of the fastest (see, for example, Jong-Won Yoon, Jinill Kim & Jungjin Lee, 2014. “Impact of Demographic Changes on Inflation and the Macroeconomy”, IMF Working Papers 14/210, International Monetary Fund).