Economists back balanced macroeconomic policies
Thursday, 24 May 2007
Economists Wednesday backed Bangladesh Bank governor Salehuddin Ahmed who had blamed the lack of coordination between monetary and fiscal policies for soaring inflation.
Economists have said a balanced mix of fiscal and monetary policies was necessary for a pragmatic macroeconomic management.
But governments did not do enough to properly tune monetary, fiscal and trade policies, setting inflationary pressures on the rise.
"There is a clear lack of coordination in the macroeconomic framework," Prof Mozaffar Ahmed told bdnews24.com.
Prof Atiur Rahman said: "The inflationary trend is bad for Bangladesh. It doesn't decline as in other countries. It only increases here."
Qazi Kholiquzzaman Ahmad, president of Bangladesh Economic Association, said policy coordination was not the only thing that needs to be streamlined.
"Coordination in action plans is also required for effective output," said Kholiquzzaman.
The economists made the comments after the central bank governor said: "We all expect an increase in tax and revenue collections. But this should be done in a coordinated way so that we can meet both demand and supply-the two factors that influence a price hike."
Inflation rose to 7.43 per cent in March from 7.28 per cent a month earlier.
Mozaffar said: "Fine-tuning is needed for better coordination in the monetary, fiscal and export-import policies."
On a poor macroeconomic framework, he said the ministries and research organisa-
Economists have said a balanced mix of fiscal and monetary policies was necessary for a pragmatic macroeconomic management.
But governments did not do enough to properly tune monetary, fiscal and trade policies, setting inflationary pressures on the rise.
"There is a clear lack of coordination in the macroeconomic framework," Prof Mozaffar Ahmed told bdnews24.com.
Prof Atiur Rahman said: "The inflationary trend is bad for Bangladesh. It doesn't decline as in other countries. It only increases here."
Qazi Kholiquzzaman Ahmad, president of Bangladesh Economic Association, said policy coordination was not the only thing that needs to be streamlined.
"Coordination in action plans is also required for effective output," said Kholiquzzaman.
The economists made the comments after the central bank governor said: "We all expect an increase in tax and revenue collections. But this should be done in a coordinated way so that we can meet both demand and supply-the two factors that influence a price hike."
Inflation rose to 7.43 per cent in March from 7.28 per cent a month earlier.
Mozaffar said: "Fine-tuning is needed for better coordination in the monetary, fiscal and export-import policies."
On a poor macroeconomic framework, he said the ministries and research organisa-