Today, the Bank releases the Quarterly Monetary Policy Report (“QMPR”) for the October to December 2016 quarter.
As we have discussed on many occasions, years, decades even, of feeding an insatiable appetite for borrowing by the government and its agencies diverted the flow of financial resources from the private sector and made investment harder and more costly, thus impeding growth. This is what we called crowding out. Private sector investment was crowded out by government borrowing. Now, with several quarters of “crowding in”, we are witnessing a long overdue correction and we can now consider that the era of Government crowding out has come to an end.
