Since inflation targeting began, annual consumer price inflation has averaged 5.7% (and 5.3% so far in the present decade), compared to 10% in the 1990s and as high as 15% in the 1980s. As the inflation-targeting regime has gradually grown in credibility, South African inflation has also become less volatile.
And the logical policy thrust is to extend this record of economic performance in the coming years and to accelerate growth. It is fair to say that this round of discussions of the Consultative Group is taking place against the backdrop of significantly changed economic outlook, reflecting strong fundamentals underpinned by anti-inflation focus of monetary policy and fiscal consolidation over the past five years.