The statement that the problem we face is largely one of demand—and we do face that problem— seems to imply either that productivity growth is called forth by aggregate demand, or a Say’s Law of productivity growth, namely that productivity growth produces its own demand. That is not an issue that can be answered purely by theorizing.
An increase in gold imports placed further pressure on the current-account balance. Newly rich consumers in rural areas increasingly put their savings in gold, a familiar store of value, while wealthy urban consumers, worried about inflation, also turned to buying gold.