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Monday, December 26, 2011

Finance Minister vs. Governor

Within a period of less than a week, two leading heads of the country's economic structure, the Finance Minister, the head of the fiscal authority and the Governor, the head of the monetary authority, gave contradictory statements on projected GDP growth in the current fiscal year. While the Finance Minister is uncertain about meeting the 7.0% growth target, which seems logical based on the update of current economic indicators, Mr. Governor, on the other hand, is confident that the targeted 7.0% growth would be achieved.

Well, receiving contradictory statements on a particular issue from the policymakers is not unusual. However, on the most important indicator of the economy, giving a completely opposite views by the top two policymakers of the country provides wrong signals to market agents, in terms of apparent inconsistency in the government, lack of coordination among top institutions, and may be, some kind of conflicts. This is obviously an warning sign and policymakers need to be prudent while providing their views in public. Can we remember the implications of contradictory comments made by these two top policymakers before the stock market crash in December 2010?

Anyway, here are the links:
Muhith himself doubts 7% growth projection.
7% growth achievable.

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