#Title

Inflation climbs to 12-year high
FROM PAGE B1
“Contrary to lowering demand, the government policy sought to boost demand by increasing domestic credit through controls over interest rates and a higher fiscal deficit. These policies further added to inflationary pressures.”
“Evidence shows that countries that adopted demand reduction policies through hikes in interest rates have all succeeded in reducing inflation substantially.”
The central bank has blamed several factors for the elevated domestic commodity prices and inflation, including higher prices of imported items and a larger depreciation of the taka, which fell around 25 per cent against the US dollar in the past one year.
The upward adjustments in fuel and energy prices have also significantly contributed to the inflationary pressure, it said.
“All these factors have collectively contributed to the overall increase in domestic commodity prices. The lack of a competitive environment, along with market syndication, could have also contributed to the current CPI inflation.”
The BB said the elevated level of inflation across the globe has declined due to the easing of supply-side conditions, and lower food and energy prices.
“The adjustments have not been reflected equally in Bangladesh’s economy mainly due to the domestic price rigidity, lack of adequate market competition and large depreciation of the domestic currency.”
Zahid Hussain, a former lead economist at the World Bank’s Dhaka office, said headline inflation declined somewhat primarily due to a decline in non-food inflation in both rural and urban markets.
“It appears that the decline in the purchasing power of consumers has started to pinch demand for non-food items in which consumers have some discretion.”
He said both monetary and fiscal policies have so far not made any significant move to combat inflation or to make it bearable for those who live hand to mouth.
“The family card programme is one exception, but it is beset with irregularities.”
The government hopes that due to the decrease in the prices of fuel, food, and fertiliser in the global market, along with the adjustment of fuel prices in the domestic market and government initiatives to keep the food and supply systems normal, inflation will remain much controlled in FY24.
Thus, it has targeted to limit it to around 6 per cent in the new fiscal year. The World Bank forecasts inflation to average 6.5 per cent in FY24 before falling to 5.7 per cent in FY25.
The IMF, however, predicts that inflation will likely exceed targets in most countries in 2024, but the rate is expected to approach targets in 2025 as global commodity prices trend lowers and oil prices decline.
The BBS said it has been updating its CPI compilation method in line with the 2020 CPI manual of the IMF from April 2023.
It has changed the base index from 2005-06 to 2021-22 and introduced the new basket weights based on the Household Income and Expenditure Survey of 2016-17.
The new basket contains 383 items (goods and services) with 749 varieties, including 127 food items with 242 varieties and 256 non-food items with 507 varieties.
CPI data are collected from 154 markets from 64 districts, according to the BBS.

Navana Pharma
FROM PAGE B1
Other than establishing a new general production unit, Navana Pharma had planned to spend Tk 9.7 crore for constructing a new utility and engineering building, according to the IPO prospectus.
Additionally, Tk 17.8 crore was lined up for refurbishing the company’s cephalosporin unit and Tk 21.1 crore for repaying loans.
The balance of the IPO proceeds remains the same with 52 per cent having been spent so far.
Navana Pharma has paid-up capital of Tk 107 crore and a reserve of Tk 250 crore, according to DSE data. Stocks of the drug maker yesterday dropped 2.53 per cent to Tk 111.6 per share.