This is a matter of grave concern to us that inflation in Bangladesh hit a 13-year high in July and reached 11.66 percent. Bangladesh Bureau of Statistics (BBS) released this inflation data on Monday, saying food inflation was marked a record high of 14.10 percent and non-food inflation at 9.68 percent in July.
The interim government Adviser to the Ministries of Finance and Planning Dr Salehuddin Ahmed and newly appointed Bangladesh Bank (BB) Governor Ahsan H Mansur are certainly aware of the latest status of inflation. We think they will do everything to check the high inflation and restore stability in the financial sector.
The finance, commerce, food, and home ministries in association with the Bangladesh Bank will have to work with all stakeholders in the financial sector to bring back stability and put it on a solid foundation. It is now clear to all that despite high inflation that hit 11.66 in July, the Bangladesh Bank under the previous administration did not give full attention to curb it. Controlling inflation should be the top priority for the authorities concerned.
Money supply, exchange rate stability, and inflation control-all depend on the decision of the Central Bank governor. The standard of living, international trade, investment, and employment also depend a lot on the decisions of the central bank of any country.
Controlling inflation should
be the top priority
for the authorities concerned
There is no control over pricing of essential products in the market, and businesses are making hefty profits showing supply-side uncertainty in the wake of the foreign exchange crisis. The immediate past government had blamed external factors for high inflation while they failed to adopt the right fiscal and monetary policy measures. The past government could not adopt an adequate tightening of the monetary policy in time to rein in inflation while the US Federal Reserve continued to raise policy rates. The market imperfections caused by growth curtail the root cause of higher food inflation and other necessities, according to economists.
The depreciation of Taka had also increased import costs, and exacerbated inflation rates. The rent-seeking on the roads by some quarters besides higher transport prices due to readjusted fuel prices have also been fuelling inflation from the supply side.
The interim government should fined a way out to further tighten monetary policy and reduce public expenditure to curb public borrowing from the central bank to align fiscal policy along with tighter monetary policy. The roads and highways should also be made rent-free to facilitate smooth flows of goods and daily necessities.
Under the previous administration, the Bangladesh Bank printed more currency (taka) in a single year than it had in the last 50 years, which brought additional inflationary pressure.
Despite the dollar crisis, the printing of high-speed money (printing currency) has an impact on higher inflation, resulting in Bangladesh’s inflation rising while Sri Lanka and other Asian countries’ inflation is falling. Inflation is the main bugbear to economy and Bangladesh has been experiencing high inflation for two years.
The interim government should strengthen the market monitoring system to control inflation especially the uptrend of price of essentials in the country. Everything has gone out of people’s purchasing capacity in the country.
Authorities concerned must attach the topmost priority to controlling the inflation rate in the country against the backdrop of the impact of Russia-Ukraine and Gaza-Israel wars and disruption of supply chain. Therefore, it is now urgently needed to take stronger measures to bring down the prices of essentials to a tolerable level in the country.
