[19]  The euro area services sector accounts for around two-thirds of gross value added and an even larger share of employment. Yet the Services Directive, which aims to reduce barriers to trade in services, has only been partially implemented and does not cover several key sectors.
Yet, because this reduced pass-through, which incidentally is not unique to South Africa, is not yet fully understood, we cannot become complacent and assume that it has become a permanent feature of our economic landscape. The pass-through has not been constant over time; just as it fell, it could rise again. The role of inflation expectations therefore becomes paramount.