Muhith eyes 7% inflation

Finance Minister AMA Muhith has expressed his hope that overall inflation will come down to 7.0 percent in the next fiscal year and to 5.5 percent in the medium term.

According to data published on Thursday, inflation dropped by 0.07 percentage points to 7.86 percent in May on the back of falling food prices.

While making the projection, Muhith highlighted some circumstances which impact the inflation.

In his budget speech on Thursday, the finance minister said, "According to the projection, stability in energy prices currently prevailing in international markets will continue in 2014 as well."

Besides, fertilizer and food prices may slightly fall, he said. "I expect food inflation will come down to a tolerable level due to satisfactory domestic agricultural production and downward trend of food prices in the international market."

On the other hand, he said, the government would keep on pursuing our strategies of tight monetary policy and fiscal consolidation.

In addition, the increase of foreign exchange supply will keep the exchange rate of taka stable, the finance minister added.