In simple terms, this statement suggests that economic growth is a priority but it must be balanced with the need to control inflation. The speaker emphasizes that while increasing economic activity and development are crucial goals for policymakers, they should not neglect the potential risks of rising prices that can erode purchasing power and harm consumers.
The deeper meaning of this quote highlights the delicate balance central banks aim to maintain between fostering economic growth and keeping a stable price level. Economic growth is generally seen as positive, driving job creation, higher incomes, and increased standards of living. However, unchecked expansion can lead to inflationary pressures, where an excess supply of money chases too few goods and services, causing prices to rise. By stating that growth should not come at the cost of inflation, Urjit Patel underscores the importance of implementing monetary policies that support sustainable economic activity without triggering unwanted price increases.
Urjit Patel is a renowned economist who served as the Governor of the Reserve Bank of India from 2016 to 2019. During his tenure, he was known for advocating balanced and prudent approaches to managing India's financial stability and monetary policy challenges. His statement reflects a broader concern within central banking circles about achieving sustainable economic growth without compromising long-term price stability.
