Causes of recent inflation

Abstract

The article analyzes the persistent double-digit inflation in Bangladesh, attributing it primarily to global and domestic supply-side issues. Key causes include rising energy and raw material prices, worldwide oil shortages, and increased production costs. Domestically, inflation is exacerbated by political instability, corruption, low business confidence, and insufficient productivity growth. The article identifies cost-push factors as more significant than demand-pull, citing stagnant output despite rising wages. Devaluation of the Taka, increased import dependence, and wage-price spirals are also noted contributors. Dr. Rahman argues that inflation control requires increasing productivity, supply of goods and services, and careful policy balancing, rather than contractionary monetary measures.