Stubborn high inflation rate over the two and a half years have diminished the purchasing power of people, causing financial strain and lowering living standards. In Bangladesh, rapidly growing inflation has led to soaring prices while incomes have not kept pace, affecting most of the population. Particularly, low-income individuals are struggling to meet living costs with their current earnings.
Several measures can be adopted to curb inflation. The Bangladesh Bank has already tightened monetary policy but its impact is not visible yet. Similarly, the government should utilise fiscal policy tools such as adjusting expenditures and tax rates to manage inflation. Price controls on specific goods and services can prevent rapid price increases, limiting the impact of inflation on the cost of living. Additionally, managing the exchange rate and implementing policies to boost production and agricultural productivity can help alleviate inflationary pressures.
Improving transportation infrastructure and fostering the growth of Small and Medium Enterprises (SMEs) can also contribute to reducing inflation by enhancing competition and lowering prices.
While these measures hold promise for controlling inflation, it is crucial to strike a balance to prevent adverse effects on economic growth and development. A coordinated and cautious approach is essential to effectively manage inflation.
Sanjay Bhattacharjee, Senior Officer
BASIC Bank Limited