The interim government’s tenure nears end with inflation unchecked

When the interim government took office, the country’s inflation rate was in the double digits. Therefore, the government’s initial challenge was to rein in inflation.

The Finance Advisor also mentioned this issue in the budget speech for the current fiscal year.

He said that when the interim government took over the responsibility of running the country in August 2024, the biggest challenge before us was to rein in uncontrolled inflation and provide relief to the people.

The government has claimed at various times that the budget for the current fiscal year has been formulated with inflation control as a priority.

The current government has shown some success in controlling inflation; most notably keeping market prices relatively stable last Ramadan.

Despite this reduction, the government was unable to bring it down to a tolerable level and in line with the target.

In addition, the inflation rate fell to 8.17 percent in October last year, the lowest in 39 months. Inflation increased further to 8.49 percent in December.

The latest rate in January was 8.58 percent.

However, many market analysts believe that the intensity is even greater on the ground. Meanwhile, the national parliamentary elections are going to be held on February 12.

In such a situation, it can be assumed that controlling inflation is going to be a big challenge for the next government as well.

This government will have to adopt more effective strategies to rein it in.

Although the people of Bangladesh did not benefit from the reduction in prices and transportation costs in the world market, they suffered from high inflation throughout the year, just like the previous two years.

Economists and market analysts have long been saying that in such a situation, it is not possible for Bangladesh Bank to reduce overall inflation through contractionary monetary policy alone.

Their recommendation was to focus on market management to curb inflation. But in reality, various weaknesses in market management have been revealed.

Therefore, the government must take initiatives that are effective and sustainable in controlling inflation in the long term.

The truth is that the country’s internal market management and monitoring are poorly managed.

Some unscrupulous traders are taking advantage of the crisis by creating artificial shortages and raising prices of goods abnormally without any justification.

This kind of market manipulation must be stopped. Governments in the past have also not been able to show such success in the past.

For this, coordination must be ensured between all concerned, starting from the Ministry of Commerce and the Department of Consumer Affairs.