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Bold steps to tame inflation

Published : 06 Jun 2023 10:23 PM

The government will make all-out efforts to tame inflation and will continue to focus on it.

Quoting the Prime Minister, Planning Minister MA Mannan on Tuesday told reporters after attending a meeting of the Executive Committee of the National Economic Council (ECNEC) that Prime Minister Sheikh Hasina has directed the authorities concerned to take necessary measures to curb the high inflation to ease the suffering of the people on commodity prices.

“The Prime Minister said, we accept that people are suffering due to inflation and load-shedding. It will not happen if we sit and accept it. It has to be tackled with various strategies. Our first objective will be to ensure that inflation does not increase further,” he informed.

“The Prime Minister said why will inflation be so high? We will store agricultural produce to control it. The reserve of rice, dal, oil and so on products should be increased. This should be done through TCB. In this case, it should be done not only in Dhaka, but also in other cities,” the Planning Minister said.

Mannan said the government will find the reasons for inflation and take immediate action to control it.

He said government plans to build smart warehouses in villages to reserve foods, which will help to cut inflation as manipulators cannot create artificial shortages of foods.

Answering a question, he said that it is not right that inflation is increasing in the country only because of the high exchange rate of US dollars, but there are some other reasons also.

 He said that efforts are going on to conduct trade with other currencies other than US dollars, adding, "The foreign currency is now hovering over $30 billion, but it might again go up to $50 billion," he said. 

Referring to the budgetary target of containing inflation at 6 percent in the next fiscal year (FY24), Mannan said there might be some concerns about attaining this target, but having such a target ahead is not wrong.

“We will have to take proper action in a speedy manner. We will have to hold the trigger tight and take the necessary market intervention at the proper time,” he said, citing an example of the recent decision of importing onion to tame the high price of onion in the local market.

Noting that inflation is gradually coming down in the EU, Mannan said although it would be hard to bring down inflation to around 6 percent in the coming days, sincere efforts would be made to bring down inflation.

“We'll have to keep the process (supply chain) smooth and ensure that no destructive element can hinder the process. Otherwise, it will be hard to contain it despite putting in the highest efforts,” he added.

According to the latest report from the Bangladesh Bureau of Statistics (BBS) on Monday, the monthly inflation rate in May soared to a decade-high of 9.94 percent, up from 9.24 percent in the previous month, as both rural and urban people are paying higher prices for food and non-food items. 

The surge in inflation is higher than the 7.32 percent growth in wages in May, the statistics agency also revealed, indicating the hardship for fixed income earners.

On the other hand, the point to point non-food inflation also increased to 9.96 percentage points in May up from 9.72 percentage points in April.

The BBS data revealed that the general inflation in the rural areas in May increased to 9.85 percent up from 8.92 percent in April. 

Besides, the general inflation in the urban areas in May increased to 9.97 percentage points up from 9.68 percentage points in April.

The BBS data showed that the national wage index rate in May was 7.32 percent up from 7.23 percent in April.