Rising prices can stoke inflation

Inflation does not mean a higher price level. Rather it is the continuous or persistent increase in the level of prices that is regarded as inflationary. Recently, national dailies have been reporting on price hike of essentials. In Bangladesh, once the prices go up, they hardly go down to their earlier state. And now that Bangladesh is an open market economy, price hike is likely to worsen.

The commerce ministry used to fix the prices of essential goods including onion and ginger before every Eid. But this step failed eventually due to open market dynamics which was creating confusion among consumers. The persistent hike in prices feed the inflationary trend of economy. As a result, the purchasing powers of the middle, upper-middle and lower classes begin to decline.

When people's purchasing power goes down and inflation hits hard, real wage falls. As a result, sometimes low-income people are pushed towards adopting corrupt means to subsist.

The government should adjust the inflation rate with the people's income every year. This procedure is called 'inflation-indexed waging'. If such steps are not taken, the nation will find itself in an upheaval sooner than later.

Md. Zillur Rahaman

Islami Bank Bangladesh Ltd.

Lalmohan Branch, Bhola.

[email protected]