If these sectors understand that the Bank targets inflation and that it is committed to the chosen target, this will engender public confidence about the Reserve Bank’s monetary policy procedures. I will now turn to the specifics of our inflation targeting monetary policy framework. The Reserve Bank monitors a number of factors that have a direct influence on inflation.
In world growth terms we are somewhat below the early 1980s recession – that is, worse than the growth troughs in the early 1990s and early 2000s (see Figure 8). Unemployment rates will certainly continue to rise, but peak well short of the levels reached in the Depression. Then, unemployment rates rose well above 20 percent in many cases.