Economists differ with 6.22 per cent inflation rate rather it is about 12 per cent


Staff Reporter :
Country’s noted economists have differed with the 6.22 percent inflation rate stated by the government and said that such data is not consistent with the ground reality.
They said that the country’s inflation rate is about 12 per cent and this trend will continue in the upcoming days.
The remarks came at a press briefing on ‘Current Socio-Economic Situation, National Budget and Expectation of the Disadvantaged People’ organised by a Citizen Platform at the CIRDAP Auditorium in the capital, with Centre for Policy Dialogue (CPD) fellow Prof Mostafizur Rahman in the chair.
Convener of the Citizen Platform and CPD distinguished Fellow Dr Debapriya Bhattacharya, ActionAid Director Farah Kabir, Dhaka University Prof. Dr. Rumana Haque, among others spoke on the occasion while coordinator of Citizen Platform Anisatul Fatema Yusuf delivered a welcome speech.
Debapriya Bhattacharya said, “The government said that the inflation rate is over six percent but it has no consistency with the ground reality. The inflation rate of daily commodities is much higher. For instance, the price of edible oil has been increased by 61 per cent.”
He further said that the price of flours has also been shot up by 58 per cent while the price of aromatic rice is up but the coarse rice is stable.
Sounding critical of the data of Bangladesh Bureau of Statistics (BBS), he said, there is inconsistency between the rate of Trading Corporation of Bangladesh (TCB) and BBS after the increase of the price of kitchen items like oil, lentils, egg, chicken and meat.
“The inflation rate given by the BBS is not the ground picture and such report is not scientific as well,” he continued.
“Out estimation is that the inflation rate is no less than 12 per cent. Such trend will continue. The products, whose prices have gone up in the global market, have not been imported in our country yet. When these products will enter into our market, the price of the daily essentials will go up once again,’ he noted. About the interest rate, he said, “The government is keeping the interest rate low with the hope of the increase of investment. But we don’t have any such report in the last few years that the investment has increased by keeping interest rate low.”
“The current interest rate is 4.4 against the deposit money. But the inflation is 6.22 per cent. It means the real value is decreasing by two percent every year. It is against the deposit policy. The value of money will decline in future. The interest rate has to be increased,” he noted.
Urging the government to make plan on inflation, he said, “If the macro-economy is fell in difficulty, the poor, the lower middle class and the middle class will be affected. Their income does not increase against the hike of the commodity price.”
This economist also said that the micro-economy is also in difficulty. There was weakness in the financial statement last year because the tax rate has not gone up to 10 percent of the Gross Domestic Product (GDP).
“Last year the operating cost was higher than the development cost. Our infrastructural limitation is that we have shortfall of money. At the same time we have resources but we cannot spend it properly,” he observed.
About the depletion trend of the foreign exchange reserve, he said, “The foreign exchange is decreasing. This decreasing trend started from September-October last year. The current reserve can meet the import cost for only four to five months.”
“If the price hike continues in the global market, it will put huge pressure on our reserve. The Bangladesh Bank will lose the capacity to pump out dollars to keep the market stable. Consequently, the value of Taka will continue to fall,” he added.
Criticising the government decision to increase the price of petrol and diesel, he said, “The government should not increase the price of it right now.”
Mentioning the progress of the Annual Development Plan (ADP) in education, health and social safety, he said, “The entire implementation level of ADP is about 41 per cent. But it is below 35 per cent in the subtotal of education, health and social safety sectors. This level has declined by two per cent compared with the previous year of 37 per cent.”