Income

Giving a ration to low-income people: economists

File photo of women carrying relief supplies provided by authorities amid the coronavirus in Dhaka. Photo: Reuters

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File photo of women carrying relief supplies provided by authorities amid the coronavirus in Dhaka. Photo: Reuters

The government should focus on restoring macroeconomic stability and providing rations to financially insolvent and low-income people in the next national budget for the financial year 2022-23, economists have recommended today.

Global inflationary pressure has affected price levels in Bangladesh in recent months and many people are going through hard times because of this and need support, they said.

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The economists were talking about a pre-budget discussion “Macroeconomic Uncertainties and Fiscal Priorities for Bangladesh” co-hosted by the Policy Research Institute (PRI) and Ekattor Television in Amari Dhaka.

Inflationary pressure has increased in the country due to rising prices in world markets shortly after the imposition of economic sanctions on Russia, said Binayak Sen, director general of the Institute for Development Studies of the Bangladesh.

Hopefully, the situation will not continue to prevail for long as European countries may not continue to accept high prices and an interruption in gas supply over the coming winter, he said.

“Meanwhile, the poor and low-income people need rations of essentials,” Sen said.

The government can target financially insolvent people and low-income workers and industrial workers who bear the brunt of inflation, the economist said.

“I hope the government has the fiscal space to introduce rations at least during the period of high inflation,” he said.

Inflation soared to 6.29% in April, its highest level in 18 months, amid continued high food and non-food prices, according to the Bangladesh Bureau of Statistics (BBS).

In March, headline inflation was 6.22%.

As to whether this inflation data is reliable, Sen said commodity prices are readily available and therefore the BBS should work on qualitative improvements so that no questions arise.

The BBS could work on calculating problem-specific inflation instead of average inflation, he added.

AB Mirza Azizul Islam, a former acting government adviser, said inflation had risen in Bangladesh due to rising world market prices, so tight monetary policy or fiscal measures would not be the answer. proper way to control it.

In this perspective, social safety nets should be expanded and the government should ensure that they reach the right people, he added.

Zahid Hussain, a former senior economist at the World Bank’s office in Dhaka, praised the central bank for allowing banks to determine prices in dollars despite the associated risk of inducing inflation.

Ahsan H Mansur, Executive Director of the PRI, recommended launching a realistic and balanced budget so that macroeconomic stability can be restored even if gross domestic product growth declines.

Professor Mustafizur Rahman, Emeritus Fellow of the Center for Policy Dialogue; Selim Raihan, Executive Director of the South Asian Network on Economic Modeling; Mohammad Abdul Majid, former chairman of the National Revenue Council; Shamsul Huq Zahid, editor of the Financial Express; Syed Mahbubur Rahman, former chairman of the Bangladesh Bankers Association (BBA), and Mashrur Reaz, chairman of the Policy Exchange of Bangladesh, also spoke at the event.