ADB sees inflation easing on bumper crops
Thursday, 03 April 2008

Agency

Asian Development Bank country director Hua Du briefs reporters after the launch of the Asian Development Outlook 2008 Update, organised by the ADB at its auditorium Wednesday. The Asian Development Bank has forecast that inflation will ease in the next fiscal year while GDP will touch 6.5 percent.

ADB's country director Hua Du at a news briefing Wednesday said that the projection had been made since the nation was expecting a bumper harvest of boro and aman crops.

She made the comments as she unveiled the agency's "Annual Development Outlook-2008" at the ADB office in the capital.

The report said inflation, fuelled by the soaring prices of food and oil, had become a major challenge for Bangladesh, but forecast that inflation would ease during fiscal 2008-09.

According to ADB figures, in 2006-07 the average rate of inflation was 7.2 percent, which soared to 9 percent in 2007-08. The report suggested inflation would fall to 8 percent in the coming fiscal year.

The multilateral lending agency also forecast that the country's GDP would jump to 6.5 percent during the next fiscal, from the current 2007-08 fiscal's 6 percent.

ADB's Dhaka office chief economist Rezaul Karim Khan, however, said the projected 8 percent inflation for the next fiscal was still worrying.

He advised the government to take measures to increase domestic agricultural production to bring inflation down to a satisfactory level.

He said the country's budget was under pressure since costs of importing food, fertiliser and oil have increased substantially.

He said currently there was no viable option for the country other than lessening import dependency by increasing domestic production.

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