Inflation in Bangladesh : Trends, Sources and Policy Options

Inflation in Bangladesh has increased from 1.9 percent in FY01 to 7.2 percent in FY06. The biggest increase was in food prices. Food price inflation increased from 1.4 percent in FY01 to 7.8 percent in FY06. By contrast, non-food price inflation only doubled during the same period. Food price inflation has been well above non-food inflation since FY04. The rise in food inflation could have resulted from developments in global commodity markets, particularly since FY05, increases in domestic production costs, and domestic demand. Inflation increased in most major world economies during FY06 following a surge in international commodity, energy and related fuel prices. The relationship between inflation and growth remains controversial both in theory and in empirics. The inflation-growth relationship for Bangladesh, India, Pakistan and Sri Lanka none of these countries have had high inflation episodes in recent decades. Their analysis shows that growth rates and inflation rates for all four countries are co integrated, implying that there is a long run relationship between inflation and growth in all four countries.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2006-02
Subjects:	ADMINISTERED PRICE, AGGREGATE DEMAND, ASSET PRICES, BANK BORROWING, BANKING SYSTEM, BILL, BROAD MONEY, CARTEL, CENTRAL BANK, COLLUSION, COMMERCIAL BANKS, COMMODITY MARKETS, COMMODITY PRICES, COMPETITIVENESS, CONSUMER GOODS, CONSUMER PRICE, CONSUMER PRICE INDEX, CORE INFLATION, CORRELATION ANALYSIS, CREDIT EXPANSION, CREDIT GROWTH, CURRENCY, DEPOSIT, DEPOSIT MONEY BANKS, DEPOSITS, DIVIDENDS, DOLLAR PRICE, DOMESTIC CREDIT, DOMESTIC DEMAND, DURABLE, ECONOMIC GROWTH, ECONOMIC THEORY, EXCESS DEMAND, EXCHANGE RATE, FISCAL DEFICIT, FISCAL POLICIES, FOOD PRICE, FOOD PRICES, GDP, GOVERNMENT BORROWING, GROWTH RATES, HIGH INFLATION, HIGH INFLATION EPISODES, IMPORT, IMPORT COST, IMPORT PRICE, IMPORTS, INFLATION, INFLATION RATE, INFLATION RATES, INFLATIONARY EXPECTATION, INFLATIONARY EXPECTATIONS, INFLATIONARY IMPACT, INFLATIONARY PRESSURE, INTEREST RATE, INTEREST RATES, INTERMEDIATE GOODS, INTERNATIONAL FINANCIAL STATISTICS, INTERNATIONAL MARKETS, INTERNATIONAL PRICES, LOOSE MONETARY POLICY, MONETARISTS, MONETARY POLICY, MONETARY PROGRAM, MONEY SUPPLY, NOMINAL WAGE, OIL PRICE, PRICE INCREASE, PRICE INDEX, PRICE INFLATION, PRICE LEVEL, PRIVATE CREDIT, PRIVATE SECTOR CREDIT, PRODUCTION COSTS, PRODUCTIVE INVESTMENTS, PUSH FACTORS, RATE OF GROWTH, RESERVE, RESERVE REQUIREMENTS, STOCKS, SUGAR PRICE, SUPPLY SHOCKS, SUPPLY SIDE, T-BILL, T-BILL RATES, T-BILLS, TREASURY, TREASURY BILLS, WORLD ECONOMIES,
Online Access:	http://documents.worldbank.org/curated/en/2006/02/16262759/inflation-bangladesh-trends-sources-policy-options https://hdl.handle.net/10986/12436
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