Economists warn of inflation as Bangladesh ‘prints money’ to offset deficit

The government has borrowed from the Bangladesh Bank after printing Tk 200 billion, says an economist

Economists and business leaders have expressed grave concern over the government’s recent move to borrow from the central bank by "printing money", warning that such "high-powered money" could further fuel inflation.

Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh (PRI), revealed on Thursday that the government borrowed Tk 200 billion from the Bangladesh Bank in March alone.

"This is fresh money being injected into the economy. Its direct impact will be felt by the common people through rising inflation," Ashikur said during a seminar.

Titled “Evolving Global Landscape for Trade and Growth”, the seminar was held at the PRI office in Banani.

The warning comes despite recent government data showing a slight dip in inflation.

Point-to-point inflation reportedly fell to 8.71 percent in March, down from 9.13 percent in February, official data showed.

Economists argued that using printed money to cover budget deficits and subsidies could reverse this trend, especially amidst an ongoing energy crisis.

The seminar, jointly organised by PRI and the Australian Government's Department of Foreign Affairs and Trade (DFAT), highlighted that Bangladesh's economic stability is under pressure from Middle East geopolitics, LDC graduation challenges, and global policy uncertainty.

Mahbubur Rahman, president of the International Chamber of Commerce, Bangladesh, called for reforms for the sake of the national economy, not merely to satisfy IMF conditions.