In a situation where much of the capital inflow has, in effect, found its way into financing consumption, higher house prices, and residential investment, rather than into much higher investment in directly growth-enhancing sectors, we would be unwise to assume that we can sustain a deficit at around current levels indefinitely.
Much will depend on the rates of economic growth we are able to sustain: the results in recent years have been encouraging, but to adopt a cricketing analogy, the innings is really just getting underway. BIS Review 8/1998  -8-  If we want to reduce the deficit, what needs to be done?