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FA says inflation fell 3 pts in just one month PDF Print E-mail
Monday, 09 June 2008

Finance adviser AB Mirza Azizul Islam said Saturday that the rate of inflation in the country had fallen three percentage points to 7.7 percent in a span of just one month, reports bdnews24.com.

Referring to data from the Bangladesh Bureau of Statistics, the adviser told reporters that the inflation rate was 10.06 percent in March, dropping to 7.7 percent in April.

Speaking to reporters at the National Economic Council after the NEC approved the coming annual development programme, Mirza Aziz said: "The flow of agricultural loans has peaked in recent times. The flow of private loans has also increased. The supply of currency increased, but so did the real income of people, which altogether have cut the inflation rate down to 7.7 per cent."

Zaid Bakht, research director at Bangladesh Institute of Development Studies, in reaction to the finance adviser's statement told bdnews24.com that the claim was astonishing.

"Prices of commodities might have been higher in April last year compared to this April. But I can say for sure that the inflation rate can not be below 9 percent on the basis of the last 12 months' average," Zaid Bakht said.

The finance adviser told reporters that things should not be judged by the situation in Dhaka. "We have to consider the situation in the entire country."

Asked how the inflation rate had scaled down with prices of commodities still so high, Mirza Aziz said that overall the real income of people had increased, and that was why an increase in the supply of currency had not had any impact on inflation.

He claimed that the prices of commodities increased in Dhaka, but the market situation was not the same in other parts of the country.

"It is not unusual that the inflation rate has come down to 7.7 percent," he added.

According to the findings of a study conducted by the Centre for Policy Dialogue, real income of the poor decreased by 37 percent, while 8.5 percent people went below the poverty line, over the last 15 months.

When his attention was drawn to the report, the finance adviser said: "I don't understand from where they collect such data. It would not be true even if the inflation rate were 11 percent."

Asked if there would be any announcement to hike fuel prices in the next budget, Mirza Aziz said: "Our economy has been under pressure since fuel prices increased abnormally in the global market."

"The government has not taken any decision yet to hike fuel prices. A decision will be taken after analysing the overall situation," he said.

According to the Bangladesh Bureau of Statistics, the point-to-point inflation rate was 10.16 percent in February this year. In comparison, the inflation rate was 6.38 percent in Feb 2005, 5.72 percent in Feb 2006 and 7.28 percent in Feb 2007.
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