What Bangladeshi economists have been saying for a long time is pretty much what the International Monetary Fund (IMF) has told our central bank and the government.

All our institutions are crumbling because of politicisation, inefficiencies, and corruption.

Acquiring the basic necessities was definitely easier in the past.

Govt must do more to stop consumers’ purchasing power erosion

Governments confront difficult trade-offs amid sharp increases in food and energy prices. Policymakers must protect low-income families from large real income losses and ensure their access to food and energy. 

Rising external debt may pose some risks to Bangladesh’s foreign exchange reserves in the future as higher debt servicing will be required on accumulated loans, said the Bangladesh Bank yesterday. 

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.

The knitwear segment has retained its position as the country’s biggest export earner in the readymade garment industry and among all the sectors of Bangladesh. 

Amid ongoing food and fuel crises worldwide, general subsidies are making a big comeback as a way of delivering social protection to the population. In fact, according to a World Bank tracker, the number of social protection measures introduced in response to rising inflation almost tripled globally between April and September 2022. More than a third of these were subsidies, including for fuel, food, fertilizers, and fees (such as for electricity, water and heating services).

A Bangladesh delegation will discuss a $4.5 billion loan with International Monetary Fund officials in Washington next week.

Inflation in some economies is rising at the fastest pace in four decades, while tight labour markets have boosted pay gains. That has raised concerns that these conditions could become self-reinforcing and lead to a wage-price spiral—a prolonged loop in which inflation leads to higher wage growth, fueling even higher inflation.

Bangladesh witnessed a record 9.5 percent inflation in August, the highest in 12 years, due to the adverse effects of fuel price hike, said Bangladesh Bureau of Statistics (BBS).

While the participants in the Ukraine war are spending billions of dollars each day on weapons and other destructive arsenals, millions of people and the leaders in South Asia and Africa are passing days in anxiety with rising external debt, a strong dollar, lingering supply chain disruptions, and food shortages.

The inflation didn't seem real, until now.

The amount by which the government has reduced the prices is so meagre – and so thoroughly insufficient to address the corresponding increase in the cost of living – that we can’t help but ask: Why even bother?

Basanti Bauri, 40, of Moulvibazar works for a renowned tea estate as a “plucker”. Her day starts at 5:00am sharp. After paying homage to the family deity, she prepares food for her three children and husband.

Inflation leads to the devaluation of a particular currency.

Inflation is the bad boy of economic phenomena.