Managing inflation well
Saturday, 26 December 2009
Amirul Islam
MEDIA reports indicate, the rate of inflation is about to surge, once again. It rose to 4.69 per cent in August from 3.46 per cent in July and the current trends would indicate no abatement of such price pressures. The updated officials statistics are not available for the last couple of months. However, the latest market indicators show that prices of most essential items are on the rise, though not on a pronounced scale. The rising trend in essential prices, if anything, speaks of inflation rising since August. If the trend keeps up, it would be likely for inflation to hit double digits in months. The trend provides the mangers of the economy to pay greater attention to monitor inflation to keep it at a reasonable level.
Escalation of inflation would hurt 40 per cent of Bangladesh's over 150 million people, living below the poverty line. Bangladesh can hardly allow inflation to ravage its economically vulnerable population. It could make life grim for its 60 million plus people, considering the fact that such people were already afflicted by inflation for several years. The annual rate was at 5.60 per cent in 2004, 6.00 per cent in 2005 and 7.00 per cent in 2006. In December, 2007 it was estimated to be 11.59 per cent and at 10.82 per cent in August, 2008. The rising inflation, in recent years, pushed more people below the poverty trap and neutralised the gains of poverty eradication.
Soaring inflation is already hurting the non-affluent sections of the population.
A study conducted in 2008 by one of the country's think tanks found that poverty increased from 40 per cent to 48.5 per cent over the past two and half years. The eroded purchasing power pushed them back into the laps of poverty. The study did not examine the conditions of people who were supposed to be better off, theoretically, such as the upper middle class, the middle middle class and the lower middle class. Many in the middle middle and the lower middle classes must have lost purchasing power during this period to turn less resourceful.
Inflation management, therefore, ought to get priority in the government agenda for the obvious reasons.
MEDIA reports indicate, the rate of inflation is about to surge, once again. It rose to 4.69 per cent in August from 3.46 per cent in July and the current trends would indicate no abatement of such price pressures. The updated officials statistics are not available for the last couple of months. However, the latest market indicators show that prices of most essential items are on the rise, though not on a pronounced scale. The rising trend in essential prices, if anything, speaks of inflation rising since August. If the trend keeps up, it would be likely for inflation to hit double digits in months. The trend provides the mangers of the economy to pay greater attention to monitor inflation to keep it at a reasonable level.
Escalation of inflation would hurt 40 per cent of Bangladesh's over 150 million people, living below the poverty line. Bangladesh can hardly allow inflation to ravage its economically vulnerable population. It could make life grim for its 60 million plus people, considering the fact that such people were already afflicted by inflation for several years. The annual rate was at 5.60 per cent in 2004, 6.00 per cent in 2005 and 7.00 per cent in 2006. In December, 2007 it was estimated to be 11.59 per cent and at 10.82 per cent in August, 2008. The rising inflation, in recent years, pushed more people below the poverty trap and neutralised the gains of poverty eradication.
Soaring inflation is already hurting the non-affluent sections of the population.
A study conducted in 2008 by one of the country's think tanks found that poverty increased from 40 per cent to 48.5 per cent over the past two and half years. The eroded purchasing power pushed them back into the laps of poverty. The study did not examine the conditions of people who were supposed to be better off, theoretically, such as the upper middle class, the middle middle class and the lower middle class. Many in the middle middle and the lower middle classes must have lost purchasing power during this period to turn less resourceful.
Inflation management, therefore, ought to get priority in the government agenda for the obvious reasons.