Low consumption growth, which is still below 5%, reflects households' alertness to income fluctuations and external risks even though inflation is still very low and under control. The government and central bank actually want to encourage growth by loosening monetary policy and increasing government consumption. However, current fiscal conditions, current account balance and capital flows do not support expansionary policies. This can be seen from the central bank's decision to increase the benchmark interest rate by 100 bps and the government's promise to postpone several infrastructure projects until 2019 and beyond in order to contain the current account deficit.
