ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Ballooning Current Account Deficit: What Options?

The choice before the government in dealing with the widening current account deficit is not between good and evil but between the two evils of attracting foreign capital and imposing curbs on imports. If the government chooses to focus on attracting foreign capital rather than on curbing the merchandise trade defi cit, it is implicitly making a judgment that the risk of economic collapse tomorrow is to be preferred to the risk of higher infl ation (and perhaps lower growth) today. This judgment can and must be questioned.

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