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.

The green chilli fiasco is not the first such failure to manage the market.

Bangladesh Bank yesterday unveiled a wishy-washy monetary policy for the next six months that will prove to be ineffective in tackling the headwinds passing through the economy.

The ongoing dollar crisis in the country will ease by January next year, said Salman F Rahman, private industry and investment adviser to the prime minister.

Cottage, micro, small-and-medium enterprises (CMSMEs) in Bangladesh are suffering from significantly lower sales at a time when inflationary pressure has pushed up production costs, according to entrepreneurs.

Businesses in Bangladesh went through a tough time in recent months due to a dearer US dollar that pushed up their costs of raw materials and a rocketing fuel bill that contributed to the surge in operating expenses. 

Bangladesh made gains in food production and ensured the availability of rice in recent years. But surging inflation, erratic weather, and the Russia-Ukraine war affected the availability of cereals and reduced low-income people’s access to food this year.

Savers are now facing losses on their deposits with banks due to surging inflation, with many solely dependent on interest earnings finding themselves in a tight corner.

People in rural areas were hit harder by food and non-food inflation than those in urban areas over the last two months, with the overall inflation surging to a 10-year high of 9.52 percent in August.

Mismanagement, system loss and a weak supply chain of the Bangladesh Petroleum Corporation (BPC) have become a perennial problem.

If one looks at the inflationary measures that are proposed in the FY2022-23 budget, there are ample reasons to be frustrated.

The government has set an inflation target of 5.5 per cent for the next fiscal year although the prices of basic commodities are sitting at elevated levels for higher commodities prices globally amid lingering supply chain disruptions and the Russia-Ukraine war.

Macroeconomic stability has been a hallmark of Bangladesh’s development strategy. This has served the country well, especially in terms of providing a solid enabling environment for the private sector.

The inflation rate comes down slightly to 5.47 per cent in October from 5.54 per cent in September due to price fall in some non-food and food items except onion.