Govt on track to bring down inflation target 7.5% by end of FY: State Minister Waseqa

Inflation would decrease to the government-set target of 7.5% by the end of the fiscal year, State Minister for Finance Waseqa Ayesha Khan said, conveying an optimistic outlook regarding the nation's economic trajectory, in parliament today (5 May).

She expressed hope that it can be achieved through a series of governmental measures, including contractionary monetary policies, import controls, and austerity measures in government expenditure.

The state minister shared her optimism while presenting the "2023-24 Budget Implementation Progress Report for the second quarter of the financial year" during a parliament session.

Waseqa said, "Controlling inflation is among the government's top priorities. The government has been taking various measures since last year to keep inflation at a bearable level. 

"However, due to the Russia-Ukraine conflict, the increase in commodity prices in the international market and the rise in the value of the US dollar, high inflationary pressures are seen across the world, including in Bangladesh."

According to Bangladesh Bureau of Statistics (BBS) data, general inflation stood at 9.48% by the end of last December and rose slightly to 9.81% by March. After that, the price of gas supplied to power plants and industries increased in May, alongside a slight increase in diesel prices. 

A potential electricity price hike is currently under discussion. Meanwhile, as April saw intense heatwaves sweep across the country, it led to concerns about rice quality and reports of production disruptions in various sectors. Given these circumstances, experts are uncertain whether price inflation will decrease at all in the coming days.

The government has intensified its policies to control inflation. Interest rate adjustments in the banking system have seen a significant increase, with the weighted average lending rate reaching 9.36% at the end of December, representing a 2.14% increase compared to the same period in the previous year. Recent adjustments have further increased lending rates, raising concerns about reduced money supply in the market.

Speaking during the session, the state minister said, "For the past few years there has been a kind of instability in the global economy due to the covid-19 and Russia-Ukraine war and other geopolitical reasons. In light of these challenges, the growth target for the current fiscal year has been revised downwards from 7.5% to 6.5%. Bangladesh is not free from the adverse effects that are currently going on in the world economy but the nation will be able to move forward by facing all tough situations."