Daily Times

The government’s chosen narrative about the economy, especially about the present bout of inflation and its causes, is the main reason for the uproar after the new year petrol price hike. For, even as the finance minister announced the mini-budget just the other day he kept saying that it would not stoke inflation at all. It would have been far better, as everybody had been suggesting, to be completely transparent about the arrangement with the Fund and what it means for prices down the road. It is, if there’s still any doubt, a very serious blow to expansionary measures incorporated in the budget, which means the finance ministry’s plans for the year have effectively been stood on their head.

Measures precisely like the fuel price hike to meet the petroleum levy target, which are part of prior actions necessary to revive the bailout program, are going to add to upward pressure on prices across the board. So if only the government had been open to the people about the severity of the predicament that the whole country finds itself in, it’s impact would not be so sudden and felt so often. Such rises are going to come every month, as everybody knows. And when senior officials say with a straight face that they are not going to effect prices, even as they do for everybody to see and feel, then they lose credibility before the very people who will vote at the next general election very soon.

Regardless of the official line, though, things have now come to the point that it is not very difficult to understand that the economy is not likely to get better in the new year either. And prices are going to remain high for the foreseeable future. It’s fine to expect international commodity prices to come down in a few months, but that projection banks only on the virus to strengthen. So if Omicron fizzles out over the next quarter or to, and there’s another global recovery, then prices will rise to new highs also. It’s best if the government communicates these realities to the people; along with the admission that it’s projections for the fiscal have been upset by IMF’s conditions. *