Controlling inflation merits priority attention of all concerned
Wednesday, 27 April 2011
Farid Ahmed
The rate of inflation is still persists in Bangladesh at a high level. This calls for special and careful handling by the government as its consequence, non-stop rising prices of basic consumer goods, is seriously hurting common or non-affluent people. While the officially admitted rate of inflation is still lower than the double digit, the unofficial but reliable other measures are that the rise in inflation has reached and crossed the double digit mark. Lately, the finance minister has himself warned that the inflation rate could be even higher in the next fiscal year compared to the present one. In this context, it would be only befitting for the government to announce the steps that it is considering to control that yet higher rate of inflation. The greatest adverse effect of inflation is noted on the poverty situation. There is now a stagnant position in relation to poverty alleviation and even some regression is noted by some experts, specially because of steady loss of purchasing power by the non-affluent people on the whole. The unchecked inflationary spirals are also having effect on savings at both individual and national levels. Thus, inflation control policies need to be considered as urgent by the economy's managers for the obvious reasons. But the monetary policies or squeezes in money supply to be operated in this respect by the Bangladesh Bank (BB) should leave ample room for meeting the genuine needs of finance for entrepreneurial activities. The squeeze should come mainly in the areas of unproductive activities. The same will then prevent large sums of money from coming into circulation that would otherwise not aid productive activities but would only fuel inflation. Meanwhile, factors like inefficient or completely lacking market monitoring activities, operation of any unholy syndicates on real or perceived grounds, extortion of businesses, regular toll collection, etc., should receive due attention of the government for initiating appropriate corrective steps at the earliest. Business operators should have no ground to demand higher prices on grounds of higher costs of doing business. The effective addressing of all related non-economic factors on a sustainable basis is, thus, critically important for control inflation.
The rate of inflation is still persists in Bangladesh at a high level. This calls for special and careful handling by the government as its consequence, non-stop rising prices of basic consumer goods, is seriously hurting common or non-affluent people. While the officially admitted rate of inflation is still lower than the double digit, the unofficial but reliable other measures are that the rise in inflation has reached and crossed the double digit mark. Lately, the finance minister has himself warned that the inflation rate could be even higher in the next fiscal year compared to the present one. In this context, it would be only befitting for the government to announce the steps that it is considering to control that yet higher rate of inflation. The greatest adverse effect of inflation is noted on the poverty situation. There is now a stagnant position in relation to poverty alleviation and even some regression is noted by some experts, specially because of steady loss of purchasing power by the non-affluent people on the whole. The unchecked inflationary spirals are also having effect on savings at both individual and national levels. Thus, inflation control policies need to be considered as urgent by the economy's managers for the obvious reasons. But the monetary policies or squeezes in money supply to be operated in this respect by the Bangladesh Bank (BB) should leave ample room for meeting the genuine needs of finance for entrepreneurial activities. The squeeze should come mainly in the areas of unproductive activities. The same will then prevent large sums of money from coming into circulation that would otherwise not aid productive activities but would only fuel inflation. Meanwhile, factors like inefficient or completely lacking market monitoring activities, operation of any unholy syndicates on real or perceived grounds, extortion of businesses, regular toll collection, etc., should receive due attention of the government for initiating appropriate corrective steps at the earliest. Business operators should have no ground to demand higher prices on grounds of higher costs of doing business. The effective addressing of all related non-economic factors on a sustainable basis is, thus, critically important for control inflation.