Home ›› 05 Jun 2022 ›› Front
Bangladesh this year will have to spend $8.2 billion more on importing nine key products than in 2021, including fuel, liquefied natural gas (LNG), and soybean oil.
Finance Minister AHM Mustafa Kamal is going to reveal this in his budget speech, say ministry sources.
The remaining six products are wheat, chemical fertiliser, palm oil, coal, maize, and rice.
Apart from these, the prices of industrial raw materials and other consumer goods as well as global freight costs have gone up in the international market.
A finance ministry official said despite this rise, the prices of fuel, natural gas, fertiliser, and power would not be increased to meet the government’s deficit in the next financial year as that would mean putting the burden on consumers.
Finance ministry sources said inflation would be a big challenge for Bangladesh in the upcoming budget due to the global crisis.
They also said the Russia-Ukraine war had worsened the situation at a time when the world economy was recovering from the Covid-19 impacts of the last two years.
Commodity prices in the international market began rising towards the end of last year due to the sudden increase in demand amid the global economic recovery.
Prices rose further when the Russia-Ukraine war began in February this year. If the war continues, it will hamper the global economic recovery.
Meanwhile, consumers in Bangladesh are struggling to cope with the unprecedented rise in commodity prices. The grocery shopping budget has doubled compared to last year.
The Centre for Policy Dialogue said the poor were under pressure due to inflation and reining in the high prices of essential commodities was a big challenge for Bangladesh.
Former lead economist at the World Bank’s Dhaka office Zahid Hussain said the prices of various commodities had been soaring in the international market even before the Russia-Ukraine war began.
That was also the trend in Bangladesh and the pressure increased when the war started, he said.
He also said inflation was a big challenge for all, including the poor, the middle class, and the rich.
“For the rich and middle class, inflation may be a source of annoyance. But it is a livelihood crisis for the lower middle class and poor households in cities and villages,” the economist added.
Bangladesh’s overall imports jumped by 48.25 per cent in 10 months of this fiscal year, thanks to the higher imports of fuel and industrial raw materials.
The letter of credit settlement reached $67.86 billion during the July-April period of the fiscal year 2021-22, up from $45.77 billion in the same period of the previous financial year, the Bangladesh Bank data shows.
