Fast growth

This refers to the article ‘A new approach ‘ (Dec 4) by Ahsan Iqbal. The writer has highlighted the major economic achievement of the PML-N — the increase of GDP from 3 percent to 5.8 percent. Currently, the World Bank gives higher weightage to gross national income that includes income sent back by citizens who are working overseas. Empirical studies indicate that fast-growing demand can lead to demand-pull and cost-push inflation. This may lead to a conflict between the macro objectives. This is why the State Bank had to raise interest rates to control inflation.

Rapid increase in real national income can lead to a higher level of inequality and social division. In India, the policies of the Modi government, for strengthening the higher GDP growth rate disproportionately, impacted the informal sector’s rising costs of business, threatening millions of lower middle class and poor workers. Similarly, economic expansion in the US led to a high level of inequality in addition to many social issues. Rapid economic growth also has given rise to protests due to the resultant pollution and environmental degradation. Fast growth, therefore, has certain implications despite its advantages.

Dr Najeeb A Khan

Islamabad