Bangladesh Inflation Driven By Structural Weaknesses, Policy Challenges, Says Report
New Delhi, Sep 25: Bangladesh’s persistent high inflation reflects deeper structural weaknesses in the economy and faulty policymaking, rather than just volatility in global markets or temporary supply shortages, a new report has said. The report from Bangladesh-based The Business Standard said that persistent inflation is also driven by weak competition, supply-chain bottlenecks, inadequate…
Bangladesh's high and persistent inflation is the result of structural economic weaknesses and poor policy decisions, according to a new report by Bangladesh-based The Business Standard. The report cites market asymmetries, weak competition, supply-chain bottlenecks, inadequate transportation and storage, excessive market concentration, and delayed economic adjustments as key contributors to inflation.
Asian Development Bank's September forecast predicts annual average inflation could reach 8.7% in fiscal 2025-26 and 9% in 2026-27. Inflation is further driven by rising food prices, currency depreciation, and increased costs of imported fuel. Hiked fuel prices under the BNP government have sparked protests. The report highlights that structural factors like weak market monitoring, ineffective competition policy, and excessive government spending create asymmetry in price movements, making inflation harder to control.
Revenue mobilization remains a challenge, with a projected budget deficit of Tk2.26 lakh crore for fiscal 2026-27, including Tk1.25 lakh crore from domestic sources, and mounting borrowing risks. The report calls for a medium-term plan that aligns spending with sustainable revenue sources, and urges discussions about energy sector inefficiencies, pricing mechanisms, petroleum tax burden, and financial weaknesses in related institutions.
Written by urgent.news from Free Press Journal's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
