Bangladesh lags behind in controlling food inflation

Mahfuja Mukul: It is not Sri Lanka that came out of bankruptcy or Afghanistan that was abandoned by the Americans, Bangladesh is the second most lagging country in controlling food inflation in South Asia. And first there is Pakistan which is in political turmoil.
This figure is found in the analysis of food price inflation data for February and March of eight countries in South Asia namely Bangladesh, India, Pakistan, Afghanistan, Nepal, Bhutan, Sri Lanka and Maldives.
Among these countries, except Afghanistan, food price inflation has increased from 3 to a maximum of 17 percent in seven other countries. Increase in food inflation means that food prices have increased in countries. Simply put, a 17 percent increase in food price inflation in a country in March means that in March of the previous year, it has to spend Tk 117 to buy the same product. That is, the price of the product increased by Tk 17 during the year.
Economists attribute weak monetary policy, a distorted market system, and the depreciation of the rupee against the dollar as the reasons for the inability to control food inflation in Bangladesh.
According to Bangladesh Bureau of Statistics (BBS) data, food inflation in Bangladesh was
9.87 percent in March this year. Which was 9.4 percent last February. In other words, inflation has increased by 8.3% in one month. Overall inflation was also upward this month. Headline inflation was 9.81 percent in March and 9.67 percent in February.
Economist Professor MM Akash said, first of all, due to the instability in the dollar market, the taka is depreciating. As a result, continued inflation is not being reduced. Secondly, the product is reaching the consumer by turning a few hands unnecessarily from the producer and there are various types of extortion. Due to limited availability of products in the hands of a few companies, they are the ones who determine the prices of the products.
Regarding Sri Lanka, the economist said, despite Sri Lanka being in a bad position, the situation has improved due to the absence of such a catalyst. Sri Lanka has managed to stabilize the value of the dollar in many ways. The syndicates that existed in the country collapsed after the new leadership came in. As a result, such problems have reduced.
The executive director of private research institute South Asian Network on Economic Modeling (SANEM) Salim Raihan said that the monetary policy is not working to control inflation due to not being able to take the right decision at the right time, not devaluing the money against the dollar, limiting the interest rate, shortfall in revenue collection, payment of additional debt of the government and various measures related to inflation.
Food Inflation in Other Countries: Politically troubled Pakistan is the only country with the highest food inflation rate in South Asia. The country last released inflation data for the month of March 2024. It can be seen that the food inflation rate in Pakistan is 17.2 percent. Which was 18.1 percent last February.
In India, food inflation rose in March compared to February. Food inflation in the country was 7.8 percent in February and 8.4 percent in March. Food inflation in Bhutan was 6.1 percent in February and rose to 6.95 percent in March. Nepal’s food inflation eased slightly compared to February. Last February, the food inflation rate in the country was 6.5 percent. Which decreased to 5.9 percent in March.
Sri Lanka’s food inflation is also very low, a surprising turnaround from bankruptcy. The country’s food inflation was 5 percent in February. It came under control in March due to multifaceted measures taken by the government. Inflation rates this month was 3.8 percent.
On the other hand, Taliban-ruled Afghanistan has created surprises in controlling food inflation. When the Americans left the country, many believed that the country was doomed. However, the armed group was able to dispel their fears. The country last released inflation data in February. It shows that food price inflation was 14.4 percent negative in that month. Negative inflation means that if a product is priced at Tk 100 in February 2023, it will cost Tk 85.6 to buy the same product in February 2024. That is, the price has decreased by Tk 14.4.
Food inflation in Maldives is half that of Bangladesh. Food price inflation in the country was 5.60 percent last February, which decreased to 4.70 percent in February.