Muhith targets to bring inflation down to 5.8 percent in 2016-17

Finance Minister AMA Muhith has proposed bringing down the average inflation rate to 5.8 percent in the coming fiscal year.

On Thursday Muhith presented his budget proposal of Tk 3.41 trillion with a deficit of Tk 978.53 billion.

In the previous budget, the finance minister had said he planned to cut average inflation down to 6.2 percent.

According to official statistics, it stood below that target - at 6.04 percent - in April.

On a point-to-point basis, inflation in April clocked at 5.61 percent.

In his budget speech, Muhith said that dwindling global oil prices had left him in a comfortable position on the inflation front.

He said he foresaw a drop in global commodity prices, including that of oil, in the next financial year.

“We have slightly slashed prices of fuel for the domestic market, which is expected to reduce non-food inflation. Further downward adjustments of fuel prices are likely to continue.

“Side by side, prospects of persistent agricultural growth and improvements in the domestic distribution system will help contain food inflation at a tolerable level,” Muhith told the House.

He said that the 5.8 percent target had been set as the government would ensure the ‘continued harmonisation of fiscal and monetary policies’.