Your policy of zero
domestic borrowing which was meant to provide the fiscal space for local and indigenous industries to access financial support locally, was yielding.
That said, China is set to contribute more to global GDP growth through 2020 than anyone else; although, as Phylaktis points out, it could be vulnerable to a financial crisis caused by
excessive domestic borrowing.
The central bank's foreign reserves have dropped by $ 36bn, or 5 per cent, over the past two months, as newly crowned King Salman bin Abdulaziz Al Saud dips into Riyadh's rainy - day fund and
increases domestic borrowing to fund public - sector salaries and large development projects.
He said the Act also provided
for domestic borrowing of N1.254 tn and external borrowing of N1.067 tn (about $ 3.5 bn).
That kind of regime can not be good for the economy where businessmen are shut out of the system, and then the country continues to go
into domestic borrowing without external borrowing.
This same 2007 budget, serviced debt with N326 billion and provided for a deficit of N0.5 trillion, an equivalent of 2.9 percent of GDP which was to be financed from proceeds of sales of government properties and
domestic borrowings.
According to her, N380billion of the borrowing came from external sources while the balance was
domestic borrowing.