How to fight inflation

Abstract

The article explores the worsening inflation crisis in Bangladesh, identifying it as a shift from double-digit inflation toward galloping inflation and stagflation—characterized by high inflation, high unemployment, and low economic growth. Dr. Rahman attributes this situation to rising international prices, particularly of oil and essential imports, alongside domestic factors such as political instability, flood and crop damage, and declining foreign investment. He emphasizes the cost-push nature of the inflation, driven by increased production costs. The author warns that current policy responses have been ineffective and might even worsen the crisis. He advocates for productivity growth, supply-side interventions, technological innovation, and fiscal discipline as necessary measures to fight inflation and avoid a deeper economic crash.