BSS, Dhaka :
Eminent economists of the country advised Bangladesh Bank (BB) to be more cautious to contain inflation, which has already appeared as the major threat to reshape the economy, dented by the recent political unrest.
The country’s inflation was in a rising trend in December mainly because of the opposition-led repeated political blockades that hiked the transport costs.
According to Bangladesh Bureau of Statistics (BBS), the general point-to-point inflation in December notched up 7.35 per cent from 7.15 per cent in November, when food inflation rose to 9.00 per cent and the non-food inflation to 5.88 per cent.
“The rate of inflation would rise further next month due mainly to the increase in wages of workers in garment and other sectors,” Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI) said.
Mansur, a former economist of the International Monetary Fund (IMF), said the central bank already included some cautionary measurers in its recently released Monetary Policy Statement (MPS), but the increasing threat should be addressed by a continual and effectual process.
In the MPS, unveiled on January 27, the BB said it would target bringing average inflation rate to 7.0 per cent by using both monetary and financial sector policy instruments.
Commenting on the MPS, Mansur said BB in its new policy encouraged more companies and businesses to enter into capital market to get their funding. “If big companies and sectors get fund from the capital market instead of banking sector than the excessive dependency of business on the capital market would reduce,” Mansur said.
Dr Salehuddin Ahmed, a former BB governor said the BB’s monetary policy stance would help stable the inflation, but it would remain a major concern requiring constant attention from the central bank.
He said the MPS lacked specific instruction to reduce expenditure in non-productive sector, which is one of the major causes of inflation.
He advised BB to have continuous policy measurers for making foreign resources more available and mobilizing more domestic savings, which would help achieve non- inflationary growth. The economist believes that the MPS would help recover the economy that suffered most from the recent political turmoil.
Besides these economists, vice-president of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI), Helal Uddin, said the monetary policy should include clear instruction about lending rate to keep inflationary pressure under control.
He said higher bank rate would slow down investment in productive sectors, which would eventually inflate inflation.
