Salary hike will raise inflation: Planning minister

Planning Minister AHM Mustafa Kamal fear the proposed salary hike of government employees will raise inflation.

He prefers raising the salaries of public servants in stages to control the market situation.

Kamal's comment comes amid speculations that the salaries of government employees will be raised in December.

Media reports claim this time the salary will be hiked by as much as 100 percent.

An increased salary will trigger inflation, he told reporters on Sunday.

Inflation in Bangladesh has been cooling down over the last six months.

According to Bangladesh Bureau of Statistics (BBS) inflation stood at 6.21 percent in November on point-to-point basis.

A week ago, the minister had hoped average inflation would come down 6 percent by the end of the current fiscal.

Finance Minister AMA Muhith, too, had announced to rein in inflation below 7 percent.

However, it is clear from Kamal's comments that the target to bring down inflation would be hampered.

A 17-member commission led by Mohammad Farashuddin has been working on a new salary structure for government service holders.

Prime Minister Sheikh Hasina has said the committee will submit its report within December.

The planning minister proposed a different way to raise salaries.

"We can do it in stages and can also consider investing the money.

"The government will keep part of its employees' salaries and invest it. This will benefit both the employees and the country," Kamal said.

"Economic growth will be boosted if we can turn the national income into investment," the planning minister added.