Policy action must follow economic forecast revision

LATER than it should have, perhaps, in obviously challenging economic conditions, the government has finally revised its economic forecasts for what little remains of 2018. It indicates an acknowledgment that high oil prices, inflation and a weakened currency will result in slower growth. The natural question that arises from this official acceptance of reality is, “What happens next?”

The interagency Development Budget Coordination Committee (DBCC), in a meeting on Tuesday, lowered the government’s target growth for gross domestic product (GDP) for 2018 to a range of 6.5 to 6.9 percent from the previous target of 7.0 to 8.0 percent. The DBCC also adjusted its inflation forecasts for 2018 upward to 4.8 to 5.2 percent from 4.0 to 4.5 percent previously, and to 3.0 to 4.0 percent for 2019.