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Inflation pressure alarming: BB PDF Print E-mail
Thursday, 01 May 2008

Dhaka, April 30 (bdnews24.com) – The economy appears to have picked up in the third quarter of the current fiscal year, Bangladesh Bank said in its report published Wednesday.

But inflation pressure mounts. At a press conference at the BB headquarters, chief economist of the central bank's policy analysis unit Mustafa K Mujeri has said the prices of commodities are alarming despite a positive trend in the economy.

"Disbursement of agricultural and industrial credit, import of industrial raw materials and intermediate goods, index of manufacturing production, an increase in exports, and inflow of workers' remittances indicate that the economy is bouncing back to its trend growth path," the central bank said in the quarterly report. BB hoped overall GDP would probably grow at a rate between 6.0 percent and 6.2 percent in fiscal 08.

The report urged the government to act quickly to ease the electricity, gas and other infrastructure constraints, letting production go unhindered.

In the first nine months of FY08, according to the report, estimated total revenue and spending stood at 7.6 percent and 10.9 percent of GDP against their yearly targets of 10.8 percent and 16.4 percent.

"Overall fiscal deficit, as share of GDP, reached 3.2 percent in the first nine months of the fiscal year, as against the yearly target of 4.8 percent." "For financing the fiscal deficit, Tk 106.2 billion came from domestic sources which included Tk 30.2 billion from bank sources.

Foreign financing stood at Tk 64.3 billion in the first nine months of FY08," the report said. It said: "The point to point inflation eased during February-March 2008. The inflation rate stood at 10.06 percent in March 2008."

But Mustafa Mujeri said the rate was alarming. "The fight against inflation, however, has to continue with increasing zeal since persistent pressure, as measured by 12 months moving average, is till evident," he said.

Bangladesh Bank continued to follow its pro-growth monetary policy stance aiming at both ensuring price stability and providing support to highest sustainable growth, Mustafa said.

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