ISAS Working Papers

Following the low inflation regime in the 1990s and early 2000s, many economies (net commodity importing countries, in particular) around the world are now facing exorbitant price hike in fuel and non-fuel commodities. The current wave of inflation has been eroding purchasing power of the low and middle income people in Bangladesh, as they need to pay much higher bills for food grain and other commodities. The Exchequer of Bangladesh, which absorbs the petroleum price hike significantly, is also under severe pressure as oil prices are now hovering around US$100 a barrel in the international market. According to the Bangladesh Bureau of Statistics, the overall inflation in Bangladesh was 8.66 percent on 12- month annual average and 11.21 percent on point-to-point basis in November 2007; whereas the food-inflation hit 13.83 percent in the same period. The concerned authorities in Bangladesh have taken several measures to contain the current inflation. However, some of their measures have proven to be countervailing and the ongoing inflation in the economy shows no sign of restrain.