The findings of the inflation expectations survey of the Bureau for Economic Research at the University of Stellenbosch show that in the third quarter of 2002, the average expectation for CPIX inflation in 2002 was 8,5 per cent. Looking further ahead, the average expectation was that CPIX inflation would only decline to 7,6 per cent in 2003 and to 7,0 per cent in 2004.
On the contrary, we regard financial stability as a precondition for balanced and sustainable economic growth and improved living conditions, because it improves the efficiency of the pricing system and economic decision-making; enhances the efficiency of financial intermediation; minimises the inflation risk premium in long-term interest rates; reduces the incentive to hedge against inflation; promotes a more equitable distribution of wealth and income; and facilitates investment decision-making.