This should be supplemented by step up in electricity generation so as to minimise fall back option of diesel generation of power. Third, in a supply constrained economy, potential output is not a reliable gauge for inflation threshold as firms operate below capacity and yet retain the pricing power.
Hence, reliability of power supply and availability of necessary industrial raw materials are important for industrial capacity utilisation and improvement in productivity. Besides moderating inflation, this will also reduce reliance on imports of products for which domestic capacity exists. Fourth, it is imperative to maintain exchange rate stability to cushion transmission of international price pressures in commodities, particularly crude oil.