Other countries in South Asia have been able to control inflation, but they are not able to.The government is somehow unable to rein in inflation. Income is not increasing at the same rate as inflation is increasing year after year. As a result, the countrymen are in trouble because they cannot match their income with their expenses.
The highest inflation in the country in the last five years was in July 2024. Inflation rose to 11.66 percent. In November 2020, inflation in the general sector was 5.52 percent. After that, it gradually increased. Inflation was 5.98 percent in November 2021, 8.85 percent in November 2022, 9.49 percent in November 2023, and 11.38 percent in November 2024. Inflation finally stopped at 10.89 percent in December 2024.
In November 2024, food products caused the most trouble for the countrymen. This month, inflation in the food sector broke all records and reached 13.80 percent. That is, in a year, 13 taka 80 paisa had to be spent extra in 2024 to buy 100 taka of food products.
Basically, inflation increased drastically in South Asian countries including Bangladesh along with other countries of the world due to the economic recession. Although most countries including Sri Lanka and Pakistan were able to reduce inflation and keep it in single digits, Bangladesh failed.
‘If there were no market syndicate and money laundering, inflation would not have taken hold like this. Efforts are being made to control food prices strategically. One of these is monetary policy. So that it can be a stable aid in the food sector. But it is difficult to reduce the prices of rice and pulses. The way the market is being controlled is a failed strategy. Policing is being done in the name of market monitoring, it will not work.’ – Economist Dr. Zahid Hossain
Economists say that there are various other factors besides economic reasons behind Bangladesh’s failure to reduce inflation. One of these is market syndicate and money laundering. In addition, due to measures such as printing money, inflation-induced inflation has become widespread.
Dr. Zahid Hossain, former chief economist of the World Bank’s Dhaka office, told Jago News, ‘Inflation is not decreasing due to various reasons. Market syndicates are also responsible for the increase in inflation. In addition, money laundering has indirectly and directly helped increase inflation. If there was no money laundering, the exchange rate would not have been so high. If there was no money laundering, the price of the dollar would not have increased. Money laundering has reduced the value of the currency. As the value of the currency has decreased, the prices of goods have also increased. Market management has been policing. I have not received any benefits from this, I have received negative results. When the police threatened the sellers, they did not come to the market out of fear. As a result, prices have also increased.’
The government is unable to rein in inflation somehow
The start of the Russia-Ukraine war in 2022 led to an increase in oil prices and the exchange rate of the US dollar in the world market. This war began when the world economy was recovering from the Covid-19 crisis. As a result, global inflation went out of control. A global fight against inflation began. Various development partners, including the World Bank, took initiatives to reduce inflation. Most countries in the world have succeeded in controlling inflation. But in several countries, including Bangladesh, the inflation rate is still out of reach.
In Sri Lanka, the inflation rate was 67.4 percent. But since September last year, the country has not been in a trend of inflation, but of deflation. That is, the prices of goods in the country’s market have not increased, but have decreased.
Even if Sri Lanka turns around, Bangladesh cannot
Two and a half years ago, the Gotabaya Rajapaksa government fell in the face of a mass uprising in Sri Lanka. In September 2022, the prices of goods in the country increased and the inflation rate reached 67.4 percent. This was the highest in five years.
In November 2020, inflation in the country was 4.1 percent, 9.9 percent in November 2021, 58.2 percent in November 2022 and 3.4 percent in November 2023.
But since September last year, Sri Lanka has not been experiencing inflation, but rather deflation. That is, the prices of goods in the country’s market have not increased, but have been falling. In November last year, the country’s inflation rate was negative 2.10 percent, and in December it was negative 1.7 percent.
Sri Lanka has taken several steps to reduce inflation by boosting the economy. Among these, it has tightened monetary policy and increased bank interest rates, the government has reduced the budget deficit by implementing austerity measures, reduced spending to reduce the annual deficit, increased revenue and restructured debt. Production in the industrial and agricultur
The highest inflation in Nepal in the last five years was 8.64 percent in September 2022. In November 2020, inflation was 4.05 percent, 6.04 percent in November 2021, 8.08 percent in November 2022, and 5.38 percent in November 2023. The latest increase in Nepal’s inflation was 5.6 percent in November 2024.
The highest inflation in Bhutan in the last five years was 9.54 percent in February 2021. In November 2020, inflation was 7.52 percent, 7.26 percent in November 2021, 4.59 percent in November 2022, and 4.6 percent in November 2023. In November 2024, Bhutan’s inflation decreased to 1.87 percent.
The same situation is in the Maldives. The highest inflation in the last five years was in June 2022, at 5.19 percent. In November 2020, inflation was negative 0.89 percent, in November 2021, 0.13, in November 2022, 2.84, in November 2023, 2.13, and in November 2024, it was 4.05 percent.
‘The government is threatening retailers. The influencers are getting away with it. This will not work. Big manipulators must be caught. The right measures must be taken at the right place. The entire market system must be taken under a package.’ – Economist Mustafa K. Mujeri
Why is inflation not decreasing in Bangladesh
While inflation is decreasing in various countries of the world, including South Asia, it is increasing in Bangladesh. Why is inflation not decreasing? In response to this question, Mustafa K. Mujeri, Executive Director of the Institute for Inclusive Finance and Development, told Jago News, inflation is not decreasing for various reasons. The current period is complicated for various reasons after the fall of the government on August 5. In addition, inflation has been at 10 to 11 percent for a long time. Inflation cannot be reduced overnight. Monetary policy has been tightened to control inflation, but it is still not decreasing. If the money supply decreases, demand shrinks, then prices will decrease.
‘Not only because of the increase in demand, there are disruptions in the supply system. There are syndicates in the market system. Market manipulation is taking place in big places. They earn big profits. The government is monitoring the market but is not touching the main place. The problem is deeper at the retail level. Those involved in the syndicate must be caught.’
The former chief economist of Bangladesh Bank said, ‘If the price of a product increases, the price of many things increases. There is a supply chain in the market, this must be fixed. There are many participants before it goes from the producer to the consumer. If the participants have excess power in the case of a product, they will earn profits for their own interests. They must be caught properly. There is a supply chain or value chain, this must be worked properly. We must check who is using excess power, we must catch them. The government is threatening and intimidating retail traders. Those who exert influence are staying out of reach. This will not work. Big manipulators must be caught. Right measures must be taken at the right place. Overall, the entire market system must be taken under a package. Supply system needs to be taken as a coordinated effort.
Ways to reduce inflation
Economist Dr. Zahid Hossain said, “The only way to escape the fire of inflation is to keep the exchange rate stable. The demand for dollars should not increase so that it does not trigger inflation. The market system must be transparent. The market management strategy must be changed. The government is trying to maintain the fixed price, it will not happen. Where policing is needed, it is not happening. The market system is a problem of extortion in the supply chain. If policing works here, it will work.”
‘It is important to take action against extortionists. Threatening at the retail level is counterproductive. Retail traders do not have the power to control the market. Big players manipulate the market. Consumer rights people are fined and scolded, the market cannot be brought under control by shouting or waving sticks. It is important to increase transparency in the market. Transparency should be brought here at the supply level of rice, pulses, wheat, edible oil, sugar. There should be a healthy system to know these.’ Zahid Hossain added.
‘Steps should be taken to reduce the prices of daily necessities. Action is not being taken against those who are syndicating. Traders say that if the production cost decreases, there will be relief. The government has reduced customs duties in various areas, but still no results have been obtained. The government’s market supervision work is also weak. The market syndicate must be broken.’- CAB Vice President SM Nazer Hossain
Life and livelihood are becoming more difficult day by day
There is weakness in the government’s market supervision work. Besides, a powerful group called the market syndicate is destabilizing the market. The Consumers Association of Bangladesh (CAB) believes that the government does not believe that there is such a thing as a market syndicate.
Regarding the fact that daily necessities are out of reach of buyers, CAB Vice President SM Nazer Hossain told Jago News, “Food is one of the main reasons for the prices of daily necessities not coming down. Food prices are increasing but incomes are not increasing. As a result, livelihoods have become very difficult. There is no history of daily necessities prices falling in our country, they only increase. If they increase in the world market, they increase here, if they decrease in the world, they do not decrease here. People’s livelihoods are becoming more difficult day by day. Steps must be taken to reduce the prices of daily necessities. Action is not being taken against those who are syndicating. Traders say that if production costs decrease, there will be relief. The government has reduced duties in various areas, but still no results have been obtained. The government’s market supervision work is also weak. The market syndicate must be broken.’
‘If the dollar price is not stable, the prices of daily necessities will not decrease. Inflation is also increasing in the international market. We must compete properly with the market. Unnecessary market arrangements cannot be curtailed. Gas and electricity supply to the industry must be provided properly. Inflation has been suppressed. It must be released like in the world market. Competition in the market must be increased.’- Shafiul Athar Taslim, Director of TK Group
Dominance of a few companies
There is no competitive environment due to the dominance of a few companies in the supply of goods in the market. Economists believe that the prices of goods have increased arbitrarily. Even if the government reduces import duties on some goods, it does not actually bring any benefit in the end. Because only a few traders import.
The government is unable to rein in inflation in any way
Economist Dr. Zahid Hossain said that there is no competition for new traders to enter the market. The market competition space must be smoothed so that new traders can easily enter. Smooth and transparent paths for these competitions are essential. The government has reduced tariffs on imports. We need to see where the benefits have gone. Those who are controlling the market must be caught. Opening the path to imports means opening the market to competition. The market must be opened up for everyone.
However, traders claim that inflation is increasing due to the unstable dollar price. In addition, the prices of goods are also increasing due to the lack of adequate gas and electricity supply to industries and factories.
Shafiul Athar Taslim, Director (Finance and Operations) of TK Group, a large importer and manufacturer of goods, told Jago News, “If the dollar price in the country is not stable, the prices of daily necessities will not decrease. Inflation is also increasing in the international market. We have to compete properly with the market. We cannot unnecessarily shrink the market system. Gas and electricity supply to industries must be provided properly. Inflation has been suppressed. We must release it like in the world market. We must increase competition in the market.”
“The cost of gas and electricity must be reduced. Gas is supplied for five hours a day. Officials and employees are being paid 24 hours a day for five hours of work. How can we compensate for this? For these reasons, the prices of daily necessities are increasing. “However, it is not right to target businessmen when inflation increases,” said Shafiul Athar Taslim.
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