Extreme recession in business. Inflation can not be caught in anything!

Dhaka Times Report. The economic situation of the country has become so critical day by day that it cannot be controlled in any way. There has been an extreme slowdown in business. Many people have given the opinion that this situation has happened especially due to power shortage.

A photocopy trader in Kataban said that the employees are struggling to pay their salaries and shop rent due to the way they have to work all day for electricity. He said, the high cost of goods has already made it difficult for us to do business. After that 3/4 times electricity load shedding throughout the day, thus there is no change other than shutting down the business. He commented, the country can never run like this.

Inflation cannot be reduced at all

Nothing can reduce inflation. New records were created in other sectors except food. Headline inflation was 10.1 percent on a point-to-point basis in March, according to the government. In March of last year, the price of the product was 100 taka, now in March of this year, the average price of that product is 110 taka 10 paisa. One-year average inflation is 10.92 percent. This rate was 8.36 percent in the same period of the previous year. Bangladesh Bureau of Statistics (BBS) released this information on April 5 inflation update. According to the agency, food inflation has eased slightly. In the current fiscal year's budget, annual average inflation was estimated at 7.5 percent. And to implement this decision, Bangladesh Bank has announced contractionary monetary policy from January to July. It reduced consumer credit and discouraged imports of luxury goods. But inflation could not be brought under control with the monetary policy of Bangladesh Bank. Economists say that the government is going in the wrong direction. Because in an import-dependent country like Bangladesh, it is not possible to control inflation by increasing the price of the dollar. According to them, the government should come out of bookish thinking. Subsidies should be reduced to control inflation. Besides, monetary policy should be coordinated with fiscal policy.

Latest Inflation Report

On a month-on-month basis, headline inflation has come down marginally. But inflation in the non-food sector reached 13.96 percent. This is the inflation record in this sector. Meanwhile, inflation stood at 10.1 percent on a point-to-point basis in March. It was 10.43 percent in February. Director General of BBS Shajahan Ali Mollah said that the price inflation in the food sector stood at 8.28 percent in March. This rate was 8.92 percent in February. And non-food inflation was 13.96 percent in March, compared to 13.57 percent in February. He said that the prices of rice, dal, masala and edible oil have decreased in March compared to February. On the other hand, inflation in the non-food sector was mainly driven by price increases in consumer goods, healthcare, transport, furniture and household goods and laundry. He also said that the average inflation rate from April 2011 to March 2012 was 10.92 percent. It was 8.36 percent during the same period last year. In the budget of the current financial year, the annual average inflation is expected to be 7.5 percent.

Due to which food inflation is decreasing

Although the inflation of food products is slightly lower, economists feel that the government has no credit behind it. Because due to the bumper crop in the country, the import dependence of food products including rice, dal, wheat has decreased.

What economists think

In an interview given to a daily, the former financial advisor of the caretaker government. AB Mirza Azizul Islam said that the inflation target set in the budget is not possible in reality. Inflation will be above 10 percent by the end of the fiscal year. He said, inflation control is not possible with monetary policy. According to him, devaluing the rupee against the dollar will not reduce non-food inflation. Because if the price of money is reduced, the cost of import-dependent goods increases. Rashed Al Mahmoud Titumir, chairman of Development Research, said the government is following the wrong policy in controlling inflation. Bangladesh imports more than exports. Therefore, increasing the price of the dollar in this country will affect inflation. According to him, the government has increased fuel prices to get a billion dollar loan from the International Monetary Fund (IMF). The conditions that the government had to accept by the company had an impact on inflation.

Inflation reached double digits on a point-to-point basis in March last year. Earlier, double digit inflation was 10.8 percent in July 2008 during the caretaker government, 11.04 percent in November during the 1998 floods, 12.7 percent in December and 11.4 percent in July 1995.

The Ministry of Finance and related circles should pay special attention to these issues. Otherwise, as the economic situation of the country is becoming uncontrollable day by day - the country will reach a critical situation in the future - which is not desired by anyone.