World Bank pitches reforms to curb inflation in Bangladesh. Finance minister urges patience

Inflation has been hovering near 10 percent for a year despite the government's goal of bringing it down to 6 percent

Published : 25 Feb 2024, 12:25 PM
Updated : 25 Feb 2024, 12:25 PM

Anna Bjerde, the World Bank’s managing director of operations, has called for measures to tamp down soaring inflation in Bangladesh. However, Finance Minister Abul Hassan Mahmood Ali says inflation cannot be reigned in overnight.

Bjerde met Ali during her single-day visit to Dhaka on Sunday to discuss a range of issues, including economic reforms and the expansion of Bangladesh's social safety net. The World Bank also pledged its support in the efforts to curb inflation.

Speaking to reporters after the meeting at the Economic Relations Department in Sher-e-Bangla Nagar, Bjerde highlighted the need for reforms to allow Bangladesh to confront inflation head-on and explore avenues to lower it.

The government aims to reduce the inflation rate to 6 percent for the fiscal year 2023-24, but the goal remains a distant one.

The onset of the Ukraine conflict in 2020 has precipitated a surge in inflation rates worldwide. In Bangladesh, inflation hovered around the 10 percent mark throughout 2023. Despite efforts and promises from the ruling party to contain the price spiral, the rate stood at 9.86 percent in January.

Underscoring the World Bank's commitment to assisting Bangladesh in tackling inflation, Bjerde flagged the need to identify areas where cooperation is needed and evaluate the situation from the perspectives of both sides.

When asked about potential strategies for Bangladesh, the World Bank official recommended reforms to the social security sector and said the lender advised the government to expand the net to individuals most impacted by inflation.

Finance Minister Ali said that efforts were under way to address the challenges posed by high inflation.

Stressing the need for patience, he said, "Inflation cannot be reduced overnight. We expect the rate to drop after Ramadan, especially around May and June.”