While we fully appreciate the need to expand electricity generating capacity in the country as a matter of urgency, it is essential that alternative financing options be carefully considered as these will have significant implications for inflation and monetary policy. A similar argument can be made for other areas where infrastructure expansion will take place.
It is accepted that increases in tariffs or indeed excise or fuel taxes should not be regarded as “true” inflation. However if they are a regular annual feature of the economic landscape they become an integral part of the inflation process which we have to take account of.