According to a news report in this paper, inflation was recorded at 15 percent during the past month i.e. December 2010. No problem is a lone ranger and our economic problem also come in droves as the current recession proves. Any measures taken to control inflation (raising interest rates, cutting government spending) will hit Pakistans growth rate whereas letting the current inflation rate continue unabated will mean that more and more people are pushed below the poverty line.
It is ironic that the current reversal in petrol prices being touted as a pro-peoples measure is what will contribute to escalating inflation as it will widen our already yawning deficit to no end. The government is in a real catch-22 with this recession and our policy makers seem to be at wits end. What they need to do is try to strike a balance between fiscal and monetary measures.
Also, industrial growth needs to be protected but so does the suffering everyman. We need to understand that this is a global recession and there is no escaping it but the government can at least mitigate its effect on the people. Our policy makers need to be original and stop sticking to old-school neo-con economic policies which got us in this mess to begin with.
OMER ASIF
Lahore
