​The macroeconomic modelling and forecasting process at the South African Reserve Bank makes use of a suite of models. This paper provides an update of the Quarterly Projection Model (QPM) – a so-called gap model – which has played an integral role in the suite since 2007. Details of the structure and functioning of the QPM model, with particular focus on the four most important gaps – the output gap, real exchange rate gap, real interest rate gap, and inflation gap (or inflation from target) – are provided. The model is then used to decompose these four gaps in order to tell a coherent story of South Africa’s macroeconomic dynamics since the inception of inflation targeting. From the perspective of the policy maker, the QPM provides a tool that quantifies the consequences of its actions on the economy, while adequately highlighting the trade-offs that are faced in the process.