Home ›› 07 Apr 2023 ›› Editorial
Every free market economy experiences inflation but when it goes out of control price of every essential item gallops like a wild horse. Inflation in the country rose to 9. 52 per cent, the highest in 11 years, in August last year because of rising commodity prices and record hikes in fuel prices. After August there had been a bit of respite when the inflation rate came down to 8.57 per cent in January this year, according to the Consumer Price Index (CPI).
Inflation again gradually began to rise since then and in March this year, it jumped to a seven-month high of 9.33 per cent, a bit down from the 11-year highest inflation in August last year. Our planning minister on 06 April shared the information following a meeting of the Executive Committee of the National Economic Council (ECNEC). However, the minister a few days back warned of rising inflation this month. His prediction came true. But what has worried us is the apprehension of further rise in inflation by our state minister for planning.
Further inflation means it might this time cross even the 11-year high inflation of August last year. If it happens, of course, there is every reason for people to be worried about what the future may hold for them. On the same day when the government data was released the World Bank and Asian Development Bank also released their data. The World Bank in its data on Bangladesh said a rise in the prices of imported goods and subsequent energy and transport price increase exacerbated the inflationary pressure on other items such as pharmaceuticals, clothing, furniture and house rent.
While assessing the impact of inflation on the poor people of Bangladesh the South Asian Network on Economic Modeling (SANEM), a private research organization, in a survey painted a terrifying picture of the livelihoods of the poor people. Its survey conducted between September 2022 and February 2023 says 73 per cent of the families were concerned about not having enough food. The number of families who had no food at least for a day was on the rise.
Economists and observers are apprehending inflation will further go up as prices of goods, fuel and electricity have already gone up over the past two months. Their apprehension can’t be dispelled as people have already begun to feel the pinch of uncontrolled price hikes of essential items. They, however, said prices of essential products went up not only because of the Ukraine-Russia war or inflation but also of the unscrupulous traders, businesses and corporates who had increased the prices of oil, egg, sugar, rice and other daily items disproportionately.
Economists and experts also think that while many countries are increasing their interest rates to rein in inflation Bangladesh is still not doing so though the interest rate is a decisive tool to fight inflation. However, Bangladesh Bank has the plan to introduce market-determined interest rates next July. Many pertinent observers believe that it will be too late to tame the inflation in the country.
It can now be said for sure that inflation will go up further after the recent price hikes in fuel oil and power. The government can’t tame inflation completely at present as everything is not at its disposal. It depends of many international factors. But what the government can do is it can check the disproportionate price hikes by a section of unscrupulous businessmen and traders. At the same time, it can expand the periphery of sales of subsidized food items through open market sales to tame inflation.
