There is, I detect, a deal of scepticism in the public’s mind about how projects are selected. This scepticism weakens public support for large-scale investment in infrastructure. Many people are concerned that money will be wasted and that political considerations will trump economic considerations. So strong governance is critical to make sure money is spent wisely in this area.
But saving households balk as deposit rates are cut, especially if rates do not compensate adequately for inflation. The fall in household financial savings, the increase in gold purchases, and the widening of the current account deficit in recent years was partly caused by negative real after tax deposit rates.