Dhaka, Bangladesh (BBN) – Bangladesh government is likely to keep the inflation rate at 6.2 per cent for the next fiscal year (FY) 2015-16. It may set the growth of gross domestic product (GDP) at 7.0 per cent.
The inflation target has been estimated at 6.2 per cent for FY 16 which has been set at 6.0 per cent for next two fiscal years (FY 17-18), a senior official associated with budget formulation told BBN in Dhaka.
“We expect that the rate of inflation will bring down at 6.2 per cent by the end of the FY 16 if a favourable natural environment and a stable political situation continues,” the official noted.
The country’s inflation as measured by the consumers’ price index (CPI) increased slightly in the month of April on point-to-point basis mainly because of rise in prices of food items.
The inflation rate rose to 6.32 per cent in April 2015 from 6.27 per cent of the previous month on point-to-point basis, according to the Bangladesh Bureau of Statistics (BBS) data.
On the other hand, the annual average inflation came down to 6.57 per cent in April last from 6.66 per cent of the previous month.
“The inflation on 12-month average basis may come down to 6.5 per cent from the existing level by the end of June 2015 in line with the target for the FY’ 15,” the official noted.
The government earlier set the inflation target at 6.5 per cent for the FY’ 15.
The policy markers’ have also expressed their opinion in favour of fixing the GDP growth to more than 7.0 per cent for the FY 16, according to the official.
The Ministry of Finance has already calculated the revised GDP growth target at 6.8 per cent considering the political uncertainty and domestic odds from the original target at 7.3 per cent for the outgoing FY’ 15.
The central bank of Bangladesh has projected that the country would achieve the GDP growth at 6.5 per cent by the end of this fiscal.
The World Bank forecast that Bangladesh would achieve a 6.5 per cent GDP growth in the FY 16 from 6.2 per cent of the FY 15 while the Asian Development Bank (ADB) projected the target at 6.4 per cent from 6.1 per cent.
On the other hand, the International Monetary Fund (IMF) has estimated that the GDP growth rate would stand at 6.1 per cent in the FY 15. It may reach at 6.5 per cent by the end of FY 16.