Inflation and the Poor in Bangladesh

This note analyses the major characteristics of the current inflationary episode in the economy along with its probable impact on different population groups in Bangladesh. The note also draws some policy implications. The inflationary characteristics points out that the economy is in the midst of supply-shock inflation fed by rapid rise in the food prices resulting from production and supply disruptions. It is important that such price increases persists through inertial momentum. The monetary policy needs to focus more on stabilizing supply in face of adverse shocks in order to protect the poor. The potential of recovery of all economic sectors is strong, so that adequate credit and other critical input flows to productive activities would be crucial to realizing the expected increase in economic activities. [BB PP no.0801]