This is apropos a Business Recorder op-ed 'Rising stagflationary concerns' carried by the newspaper yesterday. That the writer, Dr Omer Javed, is prolific is a fact. His writings invariably show his dexterity in matters of economics and finance.
According to him, for example, "The IMF, therefore, needs to understand that countries, including Pakistan, could fall into deep recesses of stagflation... . And therefore, pushing Pakistan to control inflation, or to drastically finance development and stimulus needs through domestic resource mobilization during pandemic, greater austerity, and upward policy rate adjustments will most probably not allow the country achieve greater macroeconomic stability, but would also likely to exacerbate unemployment, poverty, and take the country to lower economic growth levels."
Whatever Dr Javed has said in order to substantiate his argument, I couldn't agree more. In my view, stagflation has already hit Pakistan as there exist persistent high inflation combined with high employment and stagnant demand in the country's economy. Or, we are facing a situation in which prices are rising but there's no significant increase in economic activity. Country's finance minister Shaukat Tarin is expected to speak about these current challenges during his upcoming IMF/World Bank meetings in the US. I wish him success.
Haris Anwar (Islamabad)
Copyright Business Recorder, 2021