Policies that could help break the inflation cycle

November 25, 2024

DHAKA – Inflation in Bangladesh is frequently discussed in the media and on social media platforms. Terms like “galloping inflation,” “rising cost of living,” “price gouging,” and “kitchen garden on fire” highlight the issue’s prominence. Many people experience distress and sleepless nights due to rising prices, indicating the severe impact of inflation on daily life.

As the next national elections approach, any government taking power would do well to prioritise the cost of living crisis. Addressing inflation should be a key focus, ensuring strategies are in place to alleviate the financial burden on citizens. The urgency of this issue cannot be overstated, as it is crucial for effective governance going forward.

Inflation has been a constant issue in Bangladesh, with little history of zero inflation in past years. Following the fall of the Awami League regime on August 5, there are expectations that the interim government will prioritise inflation control, moving away from the corrupt practices of the past 15 years. In response, Bangladesh Bank raised the policy interest rate and announced measures to halt money printing for government loans while aiming for better fiscal and monetary balance.

On November 17, Prof Muhammad Yunus emphasised efforts to lower inflation, highlighting actions like high interest rates, removing LC limits on grain imports, and improving supply chains. “Efforts are underway to curb extortion in the supply chain, which we hope will help reduce market prices,” Dr Yunus added.

Controlling inflation is challenging, as seen in the last 50 years of global economic history. Following the Covid disruptions in 2020, nearly every country experienced double-digit inflation, prompting