There's no instance of market control success in world: Akbar

FE Team | Published: September 28, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Former Finance Adviser Akbar Ali Khan Thursday painted a gloomy picture of the country's economic prospect resulting from adverse impact of rising inflation, reports UNB.
"I can see an ominous signâ€¦ the economy is passing through a vulnerable situation," he told an exchange of opinions meeting at Jatiya Press Club.
Somunnay, an independent economic research institution, organised the meeting marking the publication ceremony of its first issue of "Bangladesh Economic Outlook". Somunnay will publish the quarterly for at least three years.
BRAC executive director and former BIDS director general Mahabub Hossain also spoke at the function chaired by Somunnay chairman Atiur Rahman.
Somunnay's visiting fellow Selim Raihan presented a survey report as published in the quarterly on the country's inflation and macroeconomic situation.
Akbar Ali explained three adverse impacts of inflation, including the inflation that affects most of the poor, who are 40 per cent of the total population, and that it now emerged as a humanitarian problem rather than economic one. "That's why I'm very much worried," he said.
He said the current trend would generate expectation of inflation among the people, which would be dangerous as a consequence. Because, he said, if people under the present circumstance think that the prices would go up further, it would be difficult to bring down the inflation.
"It is also a matter of great concern that the economic growth could slow down which is already evident."
The former Finance Adviser said the study did not forecast what is going to happen next year, but the decline in opening the sector-wise Letters of Credit (L/Cs) indicate that there would be a pressure on the GDP growth next year.
He criticised the ongoing efforts to control market and said there is no instance of success in controlling market in the world, which is also obvious in Bangladesh.
He added that the private sector should be given the responsibility to operate in the market as the driving force of the economy.
Akbar suggested huge import of cereals to face the situation and mentioned that the then government had imported 6.2 million tonnes of cereals to face the food shortage out of 1998 flooding. But this year, it would require more as the population by now has increased.
Somunnay study estimated average inflation at 14.1 per cent during last one year as against Bangladesh Bureau of Statistics (BBS) estimate of 8.5 per cent.
The study considered the much-talked about reasons behind the inflation. Of them, the factors contributed most are increase in food prices, slow growth in agriculture, rise in international prices of food items, sharp depreciation of Tk against US dollar, particularly Indian Rupee, and rise in fuel oil prices.