Bangladesh inflation soared (5.86 percent to 11.38 percent in 2022-2024), driven by global shocks and food prices.
Govt must rein in inflation, adopt more business-friendly policies
While stabilising the economy is a priority, the roots of Bangladesh’s recent turmoil lie in a crisis of governance.
The interim government is set to import seven lakh tonnes of rice, the highest in the last seven fiscal years, as it looks to shore up its depleting food grain stock and ease the cost of living crisis for the low- and fixed-income people battered by the prolonged high inflation.
Arrival of winter vegetables contributes to the decline
Many low-income and unskilled workers in Bangladesh’s agriculture, industrial and service sectors are being compelled to reduce consumption as rising inflation eroded their real incomes over the past three years.
Even after the political changeover in early August, the domestic market has been reeling under the influence of oligarchs, according to economist Hossain Zillur Rahman.
Inflation rises to 10.87 percent in October from 9.92 percent in September
Bangladesh’s inflation continued to ease for the second consecutive month in September as prices of both food and non-food items cooled off, according to the statistics bureau.
Bangladesh’s worsening economic crisis has spun off a price shock with food inflation crossing 14 percent in July for the first time in 13 years.
Risk assessments of the kind done by the IMF are not usually done by the government, although it would have been desirable.
With inflation edging towards double digits and quarterly GDP growth nearly halving year on year, pressure on consumers is mounting and experts are pointing at even darker clouds.
The International Monetary Fund (IMF) said that the latest monetary policy adopted by the Bangladesh Bank would help to curb inflation, but added that further measures would be needed to make it durable.
Inflation is the leading cause of the slow growth of leading food makers
The pass-through of a sharp depreciation of the local currency accounted for half of the inflation surge seen in Bangladesh in the last financial year, according to the International Monetary Fund (IMF)
government is likely to lower its economic growth target by one percentage point for the fiscal year ending in June
Inflation once again grazed double digits in October, advancing 30 basis points to 9.93 percent despite the government’s repeated assurances of measures to rein it in.
With major indicators showing stress in the economy, there is no good news in the investment flow too as investors now prefer to stay away from taking new projects or expanding their existing capacity.
Inflation in Bangladesh has reached its highest level in a decade and has been a persistent problem for more than 18 months, starting from early last year.
