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BB forecasts fall in inflation PDF Print E-mail
Friday, 08 August 2008

Dhaka, Aug 7 ( - The central bank has forecast that the rate of inflation will drop after the Aman harvest as bumper production is expected this season.

In its April-June quarterly report, published Thursday, Bangladesh Bank said inflation had been falling since March.

At a press conference on the report's publication, BB chief economist Mustafa K Mujeri said it was unexpected that the price of rice did not fall despite a bumper Boro crop last season.

Mujeri blamed hoarding by both farmers and wholesalers, but expected that they would begin selling their stocks after the Aman harvest resulting in a steady supply of rice in the markets.

Inflation reached 11.59 percent in December last year, but the BB economist said the rate of inflation in Bangladesh was at present lower than in the neighbouring countries.

"In June, the rate of inflation was 11 percent in India, 20.2 percent in Sri Lanka and 21.2 percent in Pakistan. But point-to-point inflation rate in Bangladesh in May was 7.44 percent."

He said the rate of inflation for June was not yet available at Bangladesh Bank.

According to Bangladesh Bureau of Statistics, point-to-point inflation rate rose to 7.8 percent in June this year.

Mujeri said: "Inflation might have slightly increased in June due to hike in fuel and CNG prices."

He asked the government to provide all out cooperation to farmers to ensure bumper Aman production.

The central bank's quarterly report said timely interventions by the government made it possible to achieve 6.2 percent GDP growth in FY08, "[d]espite recurrent floods, devastating cyclone (Sidr), temporary disruption in domestic production and supply, widespread outbreak of avian influenza (bird flu) in the poultry sector and persistent price hike of essential commodities including fuel in the global market."

It also mentioned that the country received approximately $8 billion in remittance in the last fiscal year that put the foreign currency reserves of the central bank in a satisfactory position.

Export earnings rose by 15 percent, it said.

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