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Finance adviser takes until June to moderate inflation to 6-7pc

FE REPORT | February 05, 2025 00:00:00


Finance Adviser Dr Salehuddin Ahmed has sought three more months to rein in high inflationary pressure that has brought significant sufferings for the people.

"It may take two to three more months for inflation to go down since the government is taking required measures," he told journalists after a meeting of the Advisers' Council Committee on Government Purchase at Bangladesh secretariat on Tuesday.

By June next, the point-to-point inflation rate will come down between 6.0 and 7.0 per cent, he added.

In response to a criticism that the rate of inflation in Sri Lanka went down, Dr Salehuddin said the problems of that small country were a bit easier, and that there was no conflict among the local people there.

"Their political consensus is that whoever comes to power has to be supported by the others," he said, distinguishing Bangladesh's case as it is facing many challenges.

The Finance Adviser further explained that Bangladesh's economic situation was worse than Sri Lanka's when the interim government took office.

"Some people compare Bangladesh with Sri Lanka which I watch in television talk shows. Sri Lanka and Bangladesh are not the same. Sri Lankan economic disaster was not as big as that of Bangladesh," he said.

"Had the Sri Lankan economy suffered as much as Bangladesh, we may not have found Sri Lanka and the island may not have existed now," he added.

When the interim government took office, he said, only 12 out of 60 banks were effectively functional while the rest were operating with severe problems. "Is there any such instance in other countries where one-third banks have not worked?"

Dr Salehuddin said: "Many people don't like us. They ask us to leave. We are trying to keep the prices at tolerable levels despite remaining under pressure."

Had the government not taken countermeasures, Bangladesh's economic situation might have worsened further, he added. Because, he said, there is no money anywhere as the unscrupulous people have looted all the money from banks.

"I have no idea if such a thing ever happened anywhere. They ran away with depositors' money. Now the government is paying the money back to the depositors. We are in talks with the central bank about how special funds can be given to the banks," he added.

The adviser said that necessary measures would be taken to stabilise the prices of essential commodities during the holy month of Ramadan.

He said he had meetings with the officials of the central bank and commercial banks as they assured him of making available required US dollars to facilitate imports of fertiliser, rice, edible oil, and fuel oil.

He said the ministry of commerce will convene a meeting with the business leaders to stabilise prices of essential commodities.

He also said that the government planned to revise the national budget in March and take some effective tax- and duty-related measures.

The adviser acknowledged that due to the increases in value-added tax (VAT), the prices of some commodities went up causing suffering to the people.

The businesses are raising the prices at much higher rates than that of the real impact of the new VAT rates, he alleged.

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