Give ration to low-income people: Economists
The government should focus on restoring macroeconomic stability and providing rations to people who are financially insolvent and in the lower-income tier in the upcoming national budget for fiscal year 2022-23, recommended economists today.
Worldwide inflationary pressure affected price levels in Bangladesh in recent months and many people are passing tough times for this and require support, they said.
The economists were addressing a pre-budget discussion "Macroeconomic Uncertainties and Budget Priorities for Bangladesh" jointly organised by Policy Research Institute (PRI) and Ekattor Television at Amari Dhaka.
Inflationary pressure rose in the country due to the increase in prices in global markets soon after economic sanctions were imposed on Russia, said Binayak Sen, director general of the Bangladesh Institute of Development Studies.
The situation will hopefully not continue to prevail for long because European countries may not continue to accept high prices and interruption to gas supplies in the upcoming winter, he said.
"Meanwhile, the poor and low-income people need rations of essentials goods," said Sen.
The government can target people who are financially insolvent and in the lower-income tier and industrial workers who are the main victims of inflation, said the economist.
"I hope the government has the fiscal space to introduce rations for at least during the high inflationary period," he said.
Inflation shot up to 6.29 per cent in April, the highest in 18 months, amidst persistently high food and non-food prices, according to the Bangladesh Bureau of Statistics (BBS).
In March, overall inflation stood at 6.22 per cent.
On whether this inflation data is reliable, Sen said product prices were readily available and so the BBS should work on qualitative improvements so that no question arises.
The BBS could work on calculating issue-specific inflation instead of average inflation, he added.
AB Mirza Azizul Islam, a former caretaker government adviser, said inflation rose in Bangladesh due to global market price hikes, so contractionary monetary policy or fiscal measures would not be the appropriate method for controlling it.
In this perspective, social safety nets should be widened and the government should ensure that it reaches the right people, he added.
Zahid Hussain, a former lead economist at the World Bank's Dhaka office, lauded the central bank for allowing banks to determine dollar prices in spite of the associated risk of it inducing inflation.
Ahsan H Mansur, executive director of the PRI, recommended launching a realistic and balanced budget so that macroeconomic stability could be restored even if the growth of gross domestic product decreased.
Prof Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue; Selim Raihan, executive director at the South Asian Network on Economic Modeling; Mohammad Abdul Majid, former chairman of the National Board of Revenue; Shamsul Huq Zahid, editor of The Financial Express; Syed Mahbubur Rahman, former chairman of the Association of Bankers, Bangladesh (ABB), and Mashrur Reaz, chairman of the Policy Exchange of Bangladesh, also spoke at the event.