Prospects, challenges and strengths  Short term prospects For monetary policy purposes, the Reserve Bank, in its Annual Policy Statement, placed real GDP growth for 2007-08 at around 8.5 per cent, assuming no further escalation in international crude prices and barring domestic or external shocks.
The policy preference for the period ahead is strongly in favour of price stability and well-anchored inflation expectations with the endeavour being to contain inflation close to 5.0 per cent in 2007-08  10  BIS Review 102/2007  and to the range of 4.0–4.5 per cent over the medium-term.