In September 2022, the inflation rate was highest at 70 per cent in Sri Lanka due to economic and dollar crises.
The inflation rate of the country, which had declared itself a bankrupt after failing to pay its foreign debt in 2022, was only 0.5 per cent in August 2024, only after two years.
Pakistan's inflation has been in the double digit for a long time. In August 2023, its inflation was more than 27 per cent. However, in August 2024, Pakistan's inflation dropped to 9.64 per cent.
Inflation rate in Bangladesh is now higher than Pakistan. According to Bangladesh Bureau of Statistics (BBS) data, the country's inflation rate was 11.66 percent in July. Bangladesh's inflation decreased slightly in August, it is still in the double digit. Inflation rate in the country was 10.49 per cent in August. Even then, inflation in Bangladesh is now the highest in South Asia.
Apart from Bangladesh, South Asia includes Afghanistan, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
According to data from the central banks of South Asian countries, Sri Lanka now has the lowest inflation in the region. It was only 0.5 percent in August. Maldives has the second lowest inflation of 1.4 per cent. Inflation is 2.04 per cent in Bhutan, 3.57 per cent in Nepal, 3.65 per cent in India and 9.64 per cent in Pakistan.
Inflation data of the Maldives, Nepal and Bhutan were updated up to July. According to these countries' data, overall commodity prices did not change significantly in last month. Accordingly, there was not much change in inflation rates in these countries in August as well.
In Bangladesh, the average rate of inflation in the last two fiscal years was above 9 per cent. However, there are questions about inflation rate published by the BBS. Economists and analysts have been claiming that the gap between the rate of increase in the prices of goods in the market and the inflation data provided by the BBS was very high.
According to them, wrong and questionable statistics are generated and presented by the BBS about every sector of the economy starting from population to GDP growth.. Even after the change of government, the credibility of the inflation data presented by the BBS is questionable. Despite severe floods in the south-eastern part of the country and increase in the prices of daily commodities, the fact that inflation has come down in August seems unusual.
Professor Barkat-i-Khuda, former chairman of Dhaka University economics department, said, "There has been high inflation in the country for a long time. BBS announced inflation rate of 11-12 per cent. But the actual rate of inflation is higher. Syndicates are creating a negative impact on supply. Even though there is sufficient supply, the common people are not able to buy the products at fair prices. Product prices are being artificially increased by syndicates. In order to reduce price inflation, besides bringing back the accuracy of information, we have to be strict against syndicates."
The average inflation rate in FY 2023-24 was 9.73 per cent. Although Bangladesh Bank talked about bringing down the inflation rate to 6 per cent in the last financial year. The limit of maximum interest rate of 9 per cent on lending rate by banks was also lifted in order to control inflation. At the same time, the interest rate was gradually increased. In this context, the lending rate increased from 9 to about 15 per cent in the last financial year. However, the effect of interest rate hike has not been visible in controlling inflation.
After the fall of Sheikh Hasina's government, economist Dr Ahsan H Mansoor was appointed Governor of Bangladesh Bank. After assuming office, he raised the interest rate (repo rate) by 50 basic points to 9 per cent. Despite this, the new governor has hinted at raising the interest rate to 10 per cent if inflation does not come down. At present, the interest rate on loans given by the country's banks has risen to 16-17 per cent.
After the fall of the Sheikh Hasina government, there has been a large increase in remittance flow to the country. Because of this, the country's foreign exchange market has become somewhat stable. The exchange rate gap between the banking sector and the retail market has come down to 1 per cent. At present, the country's banks are trading at a maximum of Tk 120 per dollar.
An economist said that businessmen should take the initiative break syndicates and all kinds of extortion to reduce inflation in the prevailing situation. He said, "Ex-Finance Minister AHM Mustafa Kamal and Governor Abdur Rauf Talukder only spoke about controlling inflation but took no action. Due to this, inflation did not decrease.
After Bangladesh Bank got an economist as its governor, many people believe that inflation will come down. However, to get the benefits of the measures, the Governor, Finance Adviser and Home Adviser have to take a concerted initiative to check inflation. In addition to breaking up syndicates in the market system, all sorts of extortion must be stopped, said economists.
