Bangladesh Bank (BB) Governor Salehuddin Ahmed hardly sees any possibility of reducing the prices of essentials in the near future, but said the rate of inflation will get stabilised to some extent next year while it will decline on long-term expectation.

He observed that the Aman harvest have had no impact on the prices, but was expecting the impact after the next Boro harvest.

"We'll have to increase domestic production as well to ensure enough supply of commodities," the governor said, adding that the central bank has been encouraging commercial banks to support food imports to ensure adequate supply.

The governor was talking to

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reporters at his office taking stock of the country's economic situation during the outgoing year (2007) as well as the economic outlook for the new year (2008).

Bangladesh Bank in the new year will focus on keeping the prices of essentials at a level commensurate with the commoners' income, particularly with that of the rural people.

"The extent of inflation is higher than the income growth. Our efforts will be to balance the gap," the governor said.

He said the rural people are suffering from the rising inflation with erosion in their income and increase in the prices of agricultural inputs like irrigation and fertiliser.

The governor said the country's economy witnessed a mixed performance during the outgoing year while the economy achieved the projected growth rate of 6.5 percent despite the spiralling prices of essentials and fuel oil on the international market, consecutive two floods, Cyclone Sidr and anti-graft drive.