Making the budget

ALEXANDRIA: The prime minister has apparently directed his economic team to produce a ‘pro-growth’ budget with ‘relief’ measures. He must have asked for an “acha sa budget” as one finance minister put it some years ago. For those who don’t read Urdu, that translates into a “nice” budget.

Well folks the bad news is that there is no such thing. The budget needs to be tight and credible. It must have robust numbers and a deficit that is well-financed based on a careful assessment of what the government’s borrowing needs will be. Not like this year where the financing was fanciful. Since the money never materialised, we simply ‘borrowed’ from the State Bank - a euphemism for printing money.

The prime minister should have given his economic team only one message. Get inflation down. Do what you have to on the fiscal or monetary side but get inflation down within the next 18 months to an end-of-period rate of no more than three per cent per annum. If you cannot do that I will replace you and find someone else who can.