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which had reduced the prices, over the past few months has passed, he said.

“We were cautiously optimistic about inflation easing. But now we’re seeing early signs of a reversal. Without fixing the fundamentals, that downward trend won’t hold,” added Raihan.

“Now, unresolved structural issues, especially supply-side bottlenecks, are causing prices to rise again, particularly of food items like rice,” he said.

“Tackling inflation requires a coordinated effort between monetary policy, fiscal policy, and domestic market management,” said Prof Raihan, also the executive director of the South Asian Network on Economic Modeling (Sanem).

“You can’t isolate one and expect long-term results,” he said.

“One of the biggest problems is we don’t even have reliable data on supply and demand. Without that, how can we manage the market effectively?” he questioned.

Raihan said when there is a shortfall in domestic production, imports are not made in time.

“Our import processes are so complex that goods reach the market too late and by then, prices have already spiked,” he said.

“When a supply crisis hits, some businesses exploit the situation. And in an uncertain business environment, this kind of behaviour becomes even more widespread,” he said.

Prof Raihan said another crisis was looming.

“We’re now entering the rainy season…and flooding is a possibility. This season usually brings additional inflation pressure,” he said.

“We’ve also consistently pointed out the imperfections in the market. So, just raising interest rates alone cannot be considered the only, or even the most effective method of reducing inflation. That’s something we’ve been repeatedly saying,” he said.