Finance Minister Abul Hassan Mahmood Ali said that Bangladesh can expect inflation to decrease later this year, but it will take at least six more months to bring it under control.
He also attributed the containment of inflation within the 9% range to measures implemented by the Awami League government at a press conference today..
During this post-budget press briefing at Osmani Milanayatan, the Finance Minister highlighted that when the Awami League assumed power in 2009, inflation was around 9% and rose to 10% the following year.
However, he emphasized that the government successfully controlled inflation within two years, maintaining it between 5-6% for the subsequent decade.
The Finance Minister explained that the 9% inflation in Bangladesh is partially due to external factors. “With Covid-19 pandemic and the Russia-Ukraine war, the global foreign exchange crisis increased inflation in the last couple of years,” said Ali.
He said, if developed countries raise interest rates to combat their own inflation, it could lead to reduced capital flow into Bangladesh and increased pressure on foreign exchange reserves.
Combined with the growth in international trade and the resulting current account deficit, this pressure has significantly depreciated the taka, contributing to the high inflation rate.
Minister Ali however affirmed that controlling inflation remains the government's top priority, necessitating the continuation of contractionary policies for the foreseeable future.
He also emphasized that the government is committed to protecting vulnerable families from the impact of inflation, stating that existing programs like OMS (Open Market Sale) and Family Card– aimed at mitigating the effects of inflation on the common people– will not only continue but may also be expanded if deemed necessary.
Earlier on Thursday, Finance Minister Abul Hassan Mahmood Ali presented the proposed National Budget of Tk 7.97 trillion to Parliament.
The proposed budget is a 4.6% increase over the current one, a notably smaller rise compared to the average annual growth of 11% seen in the previous five years.