It is possible for South Africa to enter a virtuous cycle of rising confidence, rising investment and stronger growth fuelling employment gains;  BIS central bankers’ speeches  5  leading to still higher levels of confidence. It will require strong leadership across the economy to create such a virtuous cycle. Let me turn more directly to the challenges of collective bargaining.
Wage negotiations and the process of wage setting are important in the central bank’s thinking because wages are a key price in the economy. You would have often heard central bank governors decry periods when salary settlements are in excess of inflation and productivity growth. I would like to make clear what the Bank’s thinking on this matter is.