...of Inflation: A Study in the Context of Bangladesh Mohammad Nayeem Abdullah1 Robaka Shamsher2 Newaz Ahmed Chowudhury3 Abstract In Asia, Bangladesh is one of the hardest hit by the current wave of inflation and oil price hike. The economy has been observing double digit inflation growth on point-to-point basis since July 2007. In Bangladesh, the correlation between per capita income and food weight in total Consumer Price Index (CPI) is one of the highest in the world and the economy is vulnerable to sharp hikes in fuel and non-fuel commodity prices. The BDTUS$ exchange rate has been depreciating steadily for some time, reaching a record high of BDT 72.70 per USD in January 2011, which has direct impact on food inflation that Bangladesh is currently experiencing. An International Monetary Fund (IMF) study shows food prices on headline inflation has been a staggering 55.9 percent in Asia in 2007, whereas the figure was 34.1 percent in the 2000-06 period. The researchers highlight that a further depreciation of the BDT could lead to additional cost push inflation for Bangladesh. This article attempts to investigate causes and consequences of inflation on the economy of Bangladesh. This paper also reviews the past record of the inflation and makes a forecast on the possible movement of inflation. At the end on the paper the researchers forward some strategic points that might be useful to reduce inflation. Keywords: Food inflation, oil price hike, general inflation, world food price...
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...Introduction As we know Bangladesh is a country of middle income. Nearly 65% of total population income is less than $1. Bangladesh is primarily an agrarian economy. 66% of in Bangladesh people are work in agriculture sector. Nowadays price hike is one of the main concerns of Bangladeshi people. Though their income is not increase as much as need but their expenses are increases day by day. As a result people consume more than their income. And poor people are getting poorer day by day. Government has taken some short-term policies but those are not paying off. In this report we try to understand that why price hike in Bangladesh, what is the reason behind it an, what consequent are arises among Bangladesh people for these unsustainable price hike in consumption goods and what are the initiative measures government can take to at least make the price level sustainable. What is Inflation? Inflation is the rise in general level of prices of goods and services. It can be said in other ways that inflation is the decrease in value of money. It means that • Each dollar can purchase fewer amounts of goods and service then previous. • It reduces the purchasing power of the currency. Inflation does not mean that all prices are increasing, even during period of rapid inflation; some prices may be relatively constant while others are falling. The troublesome aspect of inflation is that prices rise unevenly, some raises sharply, some slowly and some don’t rise at all. The main...
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...University of Dhaka A Report on “Inflation: Perspective Bangladesh” Date of Submission: May 26, 2011 A Report on “Inflation: Perspective Bangladesh” Course no. & name: F-203-Macroeconomics Submitted to: Mohammad Salahuddin Chowdhury Lecturer Department of Finance University of Dhaka Submitted by: Group: Morning Stars Sec-B BBA 16th batch Dept. of Finance University of Dhaka Date of Submission: May 26, 2011 Group members are Name | Roll | K. M. Najmus Sakib | 16-020 | Mobasheera Tasnim | 16-052 | Md. Kamrul Islam | 16-090 | Rajib Kumar Deb | 16-106 | Shaykha Sultana | 16-160 | Md. Shamsul Alam | 16-172 | Letter of Transmittal May 26, 2011 Mohammad Salahuddin Chowdhury Lecturer Department of Finance University of Dhaka Subject: Submission of a report on “Inflation: Perspective Bangladesh” Dear Sir, We are presenting a report on “Inflation: Perspective Bangladesh”. In this report we have included various methodologies to explain the current scenario of inflation in Bangladesh. In making the study, we had to take help from the various sources of internet, different institutes and class lectures of our course teacher. We are grateful to them for extending generous help. We acknowledge the contribution of our course teacher heartily. We have tried to use our academic knowledge in real life. We are pleased to be granted this vital opportunity and grateful for your versatile assistance. We hope that our work...
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...Management Department Assignment Cyclical Effects of Inflation in the Economy of Bangladesh Course Name:- Micro Economics Course Number:- 1208 Submitted To Mr. Shah Redwan Chowdhury Assistant Professor Management Studies Jagannath University Submitted By Amity (Group-07) (114922-114940) 6th Batch, Sec:-B Management Studies Jagannath University Sl/No | Name | Roll | Status | 01 | Abul Hasan Emon | 114922 | Absent | 02 | Ashif Manowar Oli | 114924 | Present | 03 | Fatema Tuz Zohora | 114926 | Present | 04 | Tanvin Haque Mitara | 114928 | Present | 05 | Md. Rafiqul Islam | 114930 | Present | 06 | Khandaker Arif Hossain | 114932 | Absent | 07 | Touhidur Rahman Al-Baky | 114934 | Present | 08 | Rajib Sarker | 114936 | Absent | 09 | Bidyut Dey | 114938 | Present | 10 | Md. Farhad Hossain | 114940 | Present | Acknowledgement:- We have taken efforts in this assignment. However, it would not have been possible without the kind support and help of many individuals. We would like to extend our sincere thanks to all of them. We are highly indebted to Mr. Shah Redwan Chowdhury Sir for his guidance and constant supervision as well as for providing necessary information regarding the assignment & also for his support in completing the project. We would...
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...PRICE INFLATION IN BANGLADESH PRICE INFLATION IN BANGLADESH Course : Economics Prepared for: Dr. Samir Kumar Sheel Assistant Professor Department of Marketing, FACULTY OF BUSINESS STUDIES Prepared by: A.T.M. Golam Kibria Khan EMBA, 19TH BATCH, ROLL: 41119055 Department of Marketing FACULTY OF BUSINESS STUDIES UNIVERSITY OF DHAKA DATE OF SUBMISSION : August 02, 2011 Letter of Transmittal August 02, 2011 Assistant Professor, Dr. Samir Kumar Sheel Course Teacher: Economics Department of Marketing Faculty of Business Studies University of Dhaka Dear Sir, With great pleasure we are submitting our Term Paper on “Price Inflation in Bangladesh”. We have found this report as of informative, beneficial as well as insightful. We have tried our level best to prepare an effective & creditable report. The report contains detail description upon Inflation and the Price inflation in Bangladesh. Here we have gathered information through different sources. I honestly hope that this analytical assessment will identify the causes and impacts of price inflation of Bangladesh. Therefore we hope you will find this report worth all the effort we have put in it. Sincerely Yours, A.T.M. Golam Kibria Khan Executive Summary 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...
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...to Domestic Prices in Bangladesh M. Golam Mortaza Habibour Rahman June 2008 Policy Analysis Unit (PAU) Bangladesh Bank Head Office, Dhaka, Bangladesh (www.bangladeshbank.org.bd) (www.bangladesh-bank.org) Policy Analysis Unit* (PAU) Working Paper Series: WP 0807 Transmission of International Commodity Prices to Domestic Prices in Bangladesh M. Golam Mortaza Research Economist Policy Analysis Unit Bangladesh Bank Habibour Rahman Research Economist Policy Analysis Unit Bangladesh Bank June 2008 Copyright © 2008 by Bangladesh Bank * In an attempt to upgrade the capacity for research and policy analysis at Bangladesh Bank (BB), PAU prepares and publishes Working Papers on macroeconomic issues as a part of its routine activities. These papers reflect research in progress, and as such comments are most welcome. It is expected that these papers would eventually be published in learned journals after undergoing due review process. Neither the Board of Directors nor the management of, or any agency of the Government of Bangladesh necessarily endorses any or all of the views expressed in these papers. The latter reflects views based on professional analysis carried out by the staff of Bangladesh Bank, and hence the usual caveat of research reports applies. [An electronic version of this paper is available at www.bangladeshbank.org.bd] Transmission of International Commodity Prices to Domestic Prices in Bangladesh M. Golam Mortaza Habibour...
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...2). Inflation in Bangladesh and Policy Responses a). Present State and comparison with some developing countries b).Problems for entrepreneurs and consumers c). Policy prescriptions d). Some specific programs e).Concluding remarks Last date of submission:1st August, 2012 a). Present State and comparison (country wise Scenario) with some developing countries: According to the Bangladesh Bureau of Statistics (BBS), the national inflation in Bangladesh is 8.56% on point-to-point basis in June 2012; whereas the food-inflation hit 7.08% and the non-food inflation hit 11.72% in the same period. The rural inflation is 7.88% on point-to-point basis in June 2012; whereas rural food and non-food inflation knockout to 6.02% and 11.88% consecutively in the same period. The urban inflation is 10.29% on point-to-point basis in June 2012 as well as successive food and non-food inflation for the same period knockout to 9.57% and 11.28%. By observing above data it can say that national inflation is highly influenced by urban inflation and non-food inflation. Table 1: Inflation Rate (Pint To Pint) FY2011-12 (1995-96=100) | | Jul, 11 | Aug, 11 | Sep, 11 | Oct, 11 | Nov, 11 | Dec, 11 | Jan, 12 | Feb, 12 | Mar, 12 | Apr, 12 | May, 12 | Jun, 12 | National | General | 10.96 | 11.29 | 11.97 | 11.42 | 11.58 | 10.63 | 11.59 | 10.43 | 10.1 | 9.93 | 9.15 | 8.56 | | Food | 13.4 | 12.7 | 13.75 | 12.82 | 12.47 | 10.4 | 10.9 | 8.92 | 8.28 | 8.12 | 7.46 | 7.08 | |...
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...ASSIGNMENT TWO | Research on the currency of Bangladesh | | GROUP MEMBERS:IFTESHAM ARA JAHAN 082604030FARIHA NOWSHIN HAQUE 1020276030MINHAZUR RAHMAN 081314030MUSA HABIB KISHAN 0930442030NUSRAT MINALLAH SHOSHI 0910283030SIDRATUL MUNTAHA KHAN 0920517530 | Table of Contents Analysis of Bangladeshi Taka (BDT) against US Dollar($) 3 Factors that influences BDT 5 Analysis of Macroeconomic variables 7 Income level 7 Fig: Income receipts of Bangladesh from 2005-2012in US dollar 8 Income payments (US dollar) in Bangladesh 8 Effects of inflation on income 9 Effects of interest rates on income level: 11 Theory of Interest Rate Parity and BDT 12 Theory of Purchasing Power Parity 14 Theory of International Fisher Effect against BDT 16 Regulations on foreign currency transfers/remittances 16 Analysis of investment opportunity for US-based MNC 17 Analysis of Bangladeshi Taka (BDT) against US Dollar ($) Exchange rates play a vital role in a country's level of trade. This is critical to almost every free market-oriented economy in the world. Numerous factors such as inflation, interest rates, current-account/trade balance, public (government) debt and political environment determine exchange rates and all are related to the trading relationship between any two countries. The exchange rate, measured as a number of units of local currency per unit of foreign currency, is the price of the...
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...WHAT IS INFLATION Inflation is best defined as a sustained increase in the general price level leading to a fall in the purchasing power or value of money MAIN CAUSES OF INFLATION * Demand-pull inflation: Demand-pull inflation is likely when there is full employment of resources and aggregate demand is increasing at a time when SRAS is inelastic. * Cost-push inflation: Cost-push inflation occurs when firms respond to rising costs, by increasing prices to protect their profit margins. There are many reasons why costs might rise: 1. Component cost- This might be because of a rise in world commodity prices such as oil, copper and agricultural products used in food processing 2. Rising labor costs-caused by wage increases, which are greater than improvements in productivity. Wage 3. Higher indirect taxes imposed by the government –A rise in the specific duty on alcohol and cigarettes, an increase in fuel duties or a rise in the standard rate of Value Added Tax. In the case of food rice demand and cost both are playing role. Inflation is an inevitable part of any economy. It is not always a bad thing though and it is necessary in a healthy economy. All in all, inflation keeps our economy going and the world turning, even if portrayed as a villain. HOW INCREASE IN FOOD PRICE IMPACT ON INFLATION The food price hike has accelerated the general inflation rate in the country. If the food price level rises at an existing rate of 1.31 percent per month and if adequate...
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...Executive Summery There are number of factors behind the rising trend of inflation in Bangladesh. The factors contributed the most in the rise hike of essential items, particularly food, are slow growth in agriculture, rise in the world prices of food items, sharp depreciation of taka against US dollar and especially against the Indian rupee, and rise in the prices of diesel and kerosene. These causes affect our general people directly. As per capita GDP is not responding with inflation, purchasing power of people has shrunk drastically. Food inflation is causing more problems for rural people than urban people. And loss of Taka’s value is making people go down class hierarchy. We recommend that Bangladesh Bank should take necessary steps to reduce inflation rate. We have to be concerned about devaluation of our currency. Inflation is a complex, dynamic process which cannot be comprehended simply through occasional debates or newspaper articles. Rigorous research is needed to understand inflation dynamics and its implications for monetary policy. Much of the responsibilities lay within the purview of local universities, policy institutes, and in particular the Bangladesh Bank. Table of Contents Introduction Inflation is an increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures...
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...INTRODUCTION Bangladesh, one of the least developed countries, undergoes numerous economical dilemmas such as shortage in power supply, poverty, lack of skilled labors and proper infrastructure, high unemployment rate, low standard of living, continuous disequilibria in the economy, defective administrative and inappropriate tax structure. However, this country has a good prospect of doing better because of having huge natural and other resources which fascinated many investors to invest in Bangladesh. In spite of going through all these hardships and troubles, this country is trying to overcome these lacking through the development of different macro aggregates. The macro aggregates that affect the development of the economy of Bangladesh are National Income, Inflation, Exchange Rate, Export, Import, Remittance, Money Supply and Government Expenditure. For this research paper, four macro aggregates have been selected and then comparison and demonstration have been done about how these four factors influence the economy of Bangladesh in the reference period (April 2013 to June 2013). The four macro aggregates are: 1. Exchange Rate 2. Export 3. Inflation 4. Remittance Among all other indicators, these four would be the most relevant and constructive ones in terms of explaining Bangladesh’s economy. 1.1 OBJECTIVE The term project has the following objectives: * To have extensive knowledge of Exchange Rate, Export, Inflation and Remittance...
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...Abdul Kayum, DGM, MPD Forecasting and Support Team: Dr. Sayera Younus, DGM, MPD Mahmud Salahuddin Naser, DGM, CEU Muhammad Amir Hossain, PhD, DGM, SD Md. Habibour Rahman, JD, CEU Md. Abdul Karim, JD, MPD Md. Omor Faruq, JD, MPD Syeda Ishrat Jahan, JD, CEU Khan Md. Saidjada, JD, CEU Rubana Hassan, JD, MPD Bushra Khanam Luna, DD, CEU Md. Ahsan Ullah, DD, MPD Coverist: Tariq Aziz, AD, DCP Monetary Policy Statement January-June 2016 Monetary Policy Department and Chief Economist’s Unit Bangladesh Bank www.bb.org.bd Table of Contents Highlights ................................................................................................ 1 Core Objectives ...................................................................................... 3 Global Developments ........................................................................... 3 Economic Growth .................................................................................. 4 Inflation .................................................................................................... 4 Money Supply ........................................................................................ 5 Policy Interest Rate...
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...Abdul Kayum, DGM, MPD Forecasting and Support Team: Dr. Sayera Younus, DGM, MPD Mahmud Salahuddin Naser, DGM, CEU Muhammad Amir Hossain, PhD, DGM, SD Md. Habibour Rahman, JD, CEU Md. Abdul Karim, JD, MPD Md. Omor Faruq, JD, MPD Syeda Ishrat Jahan, JD, CEU Khan Md. Saidjada, JD, CEU Rubana Hassan, JD, MPD Bushra Khanam Luna, DD, CEU Md. Ahsan Ullah, DD, MPD Coverist: Tariq Aziz, AD, DCP Monetary Policy Statement January-June 2016 Monetary Policy Department and Chief Economist’s Unit Bangladesh Bank www.bb.org.bd Table of Contents Highlights ................................................................................................ 1 Core Objectives ...................................................................................... 3 Global Developments ........................................................................... 3 Economic Growth .................................................................................. 4 Inflation .................................................................................................... 4 Money Supply ........................................................................................ 5 Policy Interest Rate...
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...REPORT ON Monetary Policy of Bangladesh PATUAKHALI SCIENCE AND TECHNOLOGY UNIVERSITY Monetary Policy of Bangladesh SUBMITTED TO M. Kazi Tamim Rahman Lecturer Department of Agricultural Economics and Rural Sociology Faculty of Business Administration and Management SUBMITTED BY Group: 01(Warrior) Level-3, Semester-1 Faculty of Business Administration and Management Name of the students | Reg. No. | Roll No. | Md. Kamruzzaman (L) | 00660 | 01 | Shuvradeb Barai | 00668 | 09 | Abu Zafour | 00680 | 21 | Sahana Parveen | 00666 | 07 | Nazmul Alam Siddiqui | 00565 | 25 | Money and Banking Course code: FBK 312 SUBMISSION DATE: PATUAKHALI SCIENCE AND TECHNOLOGY UNIVERSITY Acknowledgement At first we desire to express our deepest sense of gratitude of almighty Allah. With profound regard we gratefully acknowledge our respected course teacher M. Kazi Tamim Rahman, Lecturer, Department of Agricultural Economics and Rural Sociology, Faculty of Business Administration and Management, for his generous help and day to day suggestion during the preparation of this report. We like to give thanks especially to our friends and many individuals, for their enthusiastic encouragements and helps during the preparation of this report us by sharing ideas regarding this subject and for their assistance in typing and proof reading this manuscript. Table of Contents Chapter – 1 ...
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...TECHNICAL PROPOSAL Inflation and its Impact on the life of Bangladeshi Chapter-1: INTRODUCTION 1. Background The Ready Made Garment (RMG) industry emerged in Bangladesh in the late 1970s and quickly expanded to the point where it's now the country's dominant industry and employs around 3.5 million workers, 85% of them women - their very presence as a female workforce challenging patriarchal traditions. Since 2012, when a mass revolt shook the industry, RMG workers have sustained - with little union influence or membership - some of the highest levels of class struggle in the world. Bangladesh with a per capita income of about $500 is one of the least developed countries of the world. Its export base is weak and heavily depends on RMG, from which it earns about 75% of its merchandize export income. RMG also employs about 3.5 million people, with about 3,600 factories in operation and any negative impact on the operation of this sector shall obviously have a large bearing on national economy. For years, these garments workers have accepted a precarious existence, working long hours for less than USD 1 a day. Over the last year, however, rapid inflation in food prices has made their wages unlivable. Inflation has been the most talked about issue in Bangladesh in the recent time. Yet, there has not been a serious look at how this is really calculated. The calculation itself has a serious implication for...
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