As examples of the latter, domestic demand in the earlier widenings ran at unsustainably fast rates, usually in excess of 7 per cent per annum for a time. Similarly, in all but one of the earlier widenings, Australia’s inflation rate was higher than the world average, and again on two occasions, we were running a significant budget deficit.
On this occasion, we have none of these imbalances. The widening of the current account deficit will be essentially the result of an external contraction of demand, with domestic demand running only slightly faster than trend. BIS Review 32/1998  -6-  The foreign debt situation is not as threatening now as the most pessimistic people in the mid-eighties feared.