Even a growth figure as high as 5.97 percent, cementing a V-shaped recovery from the pandemic, is unlikely to make too many people happy because of the balance of payments (BoP) crisis that will still dominate the headlines as well as policy meetings. One reason, of many, that we are in this situation is that most governments have been conveniently flashing, and celebrating, just such figures in isolation, for political more than economic reasons, even as the more important indicators flashed SOS signals. Now, though, we have come to the end of the road and the only thing that can possibly keep us from falling over the edge is to find ways of achieving sustainable, not necessarily high, growth.
Despite all the mafias, interest groups, middlemen, even international commodity trends that influence local inflation, the number one thing to do is not try and force price controls, but rather getting exports to grow enough to trim the trade deficit. That’s a pretty long term project in itself, and it hasn’t been so much as touched so far because no government wants to be seen spending (for the long term) with nothing to show on the next campaign trail. Even now, as always, the opposition will draw political mileage from this and attack the government instead of aiding it in curing the economy.
