Reining in inflation can ensure GDP growth target

The findings of a recently conducted online survey have revealed that the country is likely to see a 5.6 per cent GDP growth while the revised government’s GDP growth target was set at 6.5 per cent for the current fiscal year. It now seems to be a far cry. According to the survey, even this 5.6 per cent GDP growth can’t be achieved easily. That too also depends on two factors – improvement of global economic situation and retaining the country’s export and remittance inflow growth.

It is easily understandable that those two factors are linked to each other. If we take it for granted that the second one can be retained somehow the first one, as it now appears, under no circumstance can possibly be better. We have already seen the shocking collapse of three American banks. The Federal Reserve i.e. the central bank of America had to lend $300 billion in emergency fund to banks to bail them out.

May be many more banks are going to meet the same fate. Along with the collapses of banks the global banking stocks have nosedived and the crisis is all pervasive. As a result, thinking that the world economy will recover very soon is a kind of a daydream. The situation is presumably going to turn from bad to worse. Under this circumstance, the survey rightly pointed three factors - forex reserve, global economic crisis and inflation – that are hindering the GDP growth.

Inflation has been wreaking havoc on literally every aspect of our economic and social life. It is showing no sign of letting up at all. Rather it continues to rise with short intervals in between. Amid such crises our Planning Minister on March 21 while talking to reporters after the meeting of Executive Committee of the National Economic Council (ECNEC) said the country’s overall inflation could rise in the current month.

What he said as the reasons for further inflation is beyond anyone’s knowledge. He said as consumers have begun to stock up on essential commodities ahead of the month of Ramadan the inflation will go up further. First of all, the reason he cited is incomprehensible. Secondly, if we accept it as true then the question arises why do people stock up on daily essentials? They do it because they have seen it since time immemorial that before and after each Ramadan prices of essentials go up uncontrollably.

So, even if he is right then the blame also goes to the government because it has failed to gain people’s trust. What he says next has also bears no significance as a reason for the inflation to go down. He is depending on bumper Boro harvest. And that too again depends on the amount of rainfall. If there is excessive rainfall his prediction will not come true. His statement contains a lot of ‘ifs’.

According to him, people buy essentials commodities – edible oil, onion, sugar etc. - in excess during the month of Ramadan and that is why commodity prices go up. So we have to accept it as a rule that the prices will go up as people buy more during the holy month of Ramadan. What he said is well known to everyone. We expect solution not mundane platitudes from those who run the states.

We urge the minister and his colleagues to come up with sensible statements and solutions to the problems that people can no longer bear.