Hiren Pandit: The Russia-Ukraine war, the monetary policy in major economies to control inflation and adverse global conditions are the main problem for the economy. The current situation can change at any time, especially due to the Russia-Ukraine war. Apart from this, repayment of earlier trade loans or trade credit and other short-term loans has now created pressure on foreign exchange. Dollars have to be sold from the reserves to keep the foreign exchange market stable. Due to this, the reserves are decreasing. This information was obtained from a report from the central bank published recently. The report highlights several challenges and opportunities for the country’s economy. The challenges are global conditions, a slow pace of recovery in major economies, mixed trends in global commodity prices, and increasing remittance flows. Possibilities include reining in rising inflation under global management, falling prices of many commodities including fuel oil in the international market, and continued policy support to boost domestic economic activity.
According to the report, Bangladesh Bank and the government have continued to provide immediate policy support in any crisis. As a result, the overall growth of the country’s economy is expected to continue. The steep inflation rate in the country has started to come down. This will reduce the rate of import inflation in the country. At the same time, if those countries recover quickly, the export income of the country will increase. At the same time, it will have a positive effect on remittances. However, the global situation and the Russia-Ukraine war may change the situation. According to the report, although the global situation is negative, it has not had a significant impact on Bangladesh. Because the production in the agricultural sector in the country has improved. At the same time, it has been possible to maintain domestic demand.
The rate of food inflation has decreased slightly in recent times, but non-food products have increased. The overall inflation rate is increasing again. The central bank expects this rate to decrease slightly in the future. Import-induced inflation has come down due to lower commodity prices in the international market. With the bumper yield of Boro in the country, the food supply is also expected to be bearable. Besides, the pressure on foreign exchange will reduce due to a reduction in import costs and an increase in remittances. This will also reduce the pressure on the depreciation of the taka against the dollar. Due to these reasons, the inflation rate may decrease slightly in the future.
It is said that the country’s foreign exchange deficit is increasing. Special tax trade credits and short-term loan repayment pressure increased. It has to pay dollars from the reserve. At the same time, the supply of dollars has to be increased to meet the import costs. This has increased the pressure on the reserve, the reserve is decreasing. The taka has also come under pressure against the dollar due to a shortfall in foreign exchange income and expenditure. According to the report, the demand for money in the banking sector has increased. Meanwhile, the banks are buying dollars in cash and the money is going to the central bank. As a result, the deficit in the bank’s liquidity management has increased. Due to the increase in transactions in the money market and increasing the supply of money to the banks through a buy-back, the liquidity situation is rapidly turning around.
A relaxed policy has been adopted in the debt repayment process to counter the ongoing macroeconomic challenges. This has reduced the defaulted loans in the banking sector. On the other hand, the growth of bank deposits has decreased. It is not saving the loan deposit ratio of the banks.
Globally, there are still additional risks in commodity supply systems, the report said. The central bank is also cautious to deal with the impact of this risk. Prices of some perishable commodities including fuel oil have fallen in the international market. Again, the prices of some essential products are increasing.
The Bangladesh Bureau of Statistics (BBS) has analyzed the inflation and wages report published last February and found surprising information. According to BBS data, the inflation rate is higher in rural than in urban. According to the report, the rural inflation rate is 8.80 percent; On the contrary, 8.75 percent in cities. This means that inflation in rural areas is 5.5 percent higher than in urban areas. This opposite picture of inflation has caused economists to think. Because the demand of those living in villages is low. Besides, income is also low due to less employment. Due to this, the cost is also less. After all, most agricultural products, especially vegetables, are in high supply. In fact, it is important to find an answer to the question of why the inflation rate is supposed to be low in the village due to these reasons, but it is not reflected in reality. The main question raised by the high rate of inflation in rural areas is, is it an indication of structural changes in the economy? That is, the income of the people of the village has increased. But the real picture tells us that the income has not actually increased in the village. Poverty rates are still high there; In addition, the number of very poor people is also high in villages.
However, some infrastructure is currently being built in the village, thereby increasing the flow of money there. However, most of this money is going into the pockets of the beneficiaries. The central bank report also says the same thing. According to the report, the flow of money to the village has remained the same, not increased; But the saving trend has decreased. Of course, a large part of remittances goes to villages; According to the BBS survey, 53 percent of which is used for luxury. Apart from this, the benefits of social security programs are also going more to the villages. From this, the rate of inflation in the village may increase slightly.
In fact, the increase in the rate of rural inflation is indicative of a major change, no doubt. The BBS report gives us the message that major structural changes have been completed in the economy. As a result, the condition of the village people has improved, their demand has increased, and their income has increased. But actually, it didn’t happen like that. However, there is a danger in this case – if the price of goods and services is higher in the village than in the city, the inflation rate may jump. If this is the case, it must be said that there is a big inflammation in the government’s product production and marketing management. If that is the case, then they should be identified and remedied quickly. Further, intensive research is needed to find out why the rate of inflation is higher in the cities than in the cities, even though money flow, density, demand and luxury are higher in the cities than in the villages.
The wall of discord between agreement and disagreement creates a crisis for both good and evil. The crisis has a reputation for preventing good from being good and forcing bad to get worse. In both dilemmas, good thinkers quickly withdraw from the neighborhood of good initiatives. And the neighborhood is defeated by various kinds of bad behavior. Allowing the good and the bad to live together in the same neighborhood, helping the bad to be free from pollution in the light of good, where it should be, sending the good from the paper field to the dressing room and creating a walkover environment creates a crisis for any economy, whether it is strong or weak.
In the desire for sustainable development and progress in society and the economy, all parties and affiliates have the opportunity to come to the form of inclusion instead of deviation in the urge to reach an uninterrupted and unconditional consensus. Economic inclusion as the motivation and doctrine of integrated initiatives in the development of the overall economy, as well as the philosophy of overall social inclusion, has been at the center of special consideration and extensive discussion. The philosophy of inclusion is widely considered in the industrialized world as a motivation to inspire everyone with values of solidarity in development and production across time and place and location. From poverty alleviation to eliminating wealth disparity in society and even establishing social justice, there is no dearth of interest initiatives to adopt and follow inclusion as a main issue to bring everyone under one umbrella irrespective of caste-like-religion-gender-economic status.
Our rural economy continues to play a major role in poverty alleviation. Agriculture has a great role to play in achieving food self-sufficiency. In the last five decades, the total population of the country has increased almost one and a half times. At the same time, the amount of agricultural land has decreased by about 15 percent, but the agricultural sector has not failed to provide food for the increased population, but despite repeated interruptions in agricultural production due to natural calamities, floods, cyclones, sea tides, technological development, efforts of the government and all-round efforts of farmers have played a role in combating agricultural poverty. is doing Two thirds of the total population of Bangladesh live in villages. The number of poor people overall has almost halved (24 percent) over the past three decades. The contribution of agriculture to the rural economy is a lot. One of the sectors of the rural economy is agriculture. If we do not make improvements in food grain production, fish production, poultry and cattle rearing, it would be difficult to feed large populations. From seven and a half crore people to 17 crore people, even after this, there was no problem with food. The rural economy has a great role in this. The implementation of the Sustainable Development Goals (SDGs) should accelerate the rural economy. In this case, productivity and people’s income should be increased.
We need a positive transformation of the rural economy. Several steps can be taken for this. Mechanization of agriculture should be strengthened to increase agricultural production, reduce the production cost of farmers, and increase profits. Access to machinery and technology is one of the tools to change the pace of the rural economy. There is no alternative to the use of mechanization and technology in agriculture to engage the large youth population in the villages and to connect them with the rural economy. Village youth or farmer’s children are highly educated and want to be well-groomed. Therefore, due to the increase in the use of advanced machinery and technology, they will be interested in working in the agriculture, fisheries, and poultry sectors. As a result, employment opportunities will be created.
Positive Transformation of the Rural Economy is Essential
Hiren Pandit
The Russia-Ukraine war, the monetary policy in major economies to control inflation and adverse global conditions are the main problem for the economy. The current situation can change at any time, especially due to the Russia-Ukraine war. Apart from this, repayment of earlier trade loans or trade credit and other short-term loans has now created pressure on foreign exchange. Dollars have to be sold from the reserves to keep the foreign exchange market stable. Due to this, the reserves are decreasing. This information was obtained from a report from the central bank published recently. The report highlights several challenges and opportunities for the country’s economy. The challenges are global conditions, a slow pace of recovery in major economies, mixed trends in global commodity prices, and increasing remittance flows. Possibilities include reining in rising inflation under global management, falling prices of many commodities including fuel oil in the international market, and continued policy support to boost domestic economic activity.
According to the report, Bangladesh Bank and the government have continued to provide immediate policy support in any crisis. As a result, the overall growth of the country’s economy is expected to continue. The steep inflation rate in the country has started to come down. This will reduce the rate of import inflation in the country. At the same time, if those countries recover quickly, the export income of the country will increase. At the same time, it will have a positive effect on remittances. However, the global situation and the Russia-Ukraine war may change the situation. According to the report, although the global situation is negative, it has not had a significant impact on Bangladesh. Because the production in the agricultural sector in the country has improved. At the same time, it has been possible to maintain domestic demand.
The rate of food inflation has decreased slightly in recent times, but non-food products have increased. The overall inflation rate is increasing again. The central bank expects this rate to decrease slightly in the future. Import-induced inflation has come down due to lower commodity prices in the international market. With the bumper yield of Boro in the country, the food supply is also expected to be bearable. Besides, the pressure on foreign exchange will reduce due to a reduction in import costs and an increase in remittances. This will also reduce the pressure on the depreciation of the taka against the dollar. Due to these reasons, the inflation rate may decrease slightly in the future.
It is said that the country’s foreign exchange deficit is increasing. Special tax trade credits and short-term loan repayment pressure increased. It has to pay dollars from the reserve. At the same time, the supply of dollars has to be increased to meet the import costs. This has increased the pressure on the reserve, the reserve is decreasing. The taka has also come under pressure against the dollar due to a shortfall in foreign exchange income and expenditure. According to the report, the demand for money in the banking sector has increased. Meanwhile, the banks are buying dollars in cash and the money is going to the central bank. As a result, the deficit in the bank’s liquidity management has increased. Due to the increase in transactions in the money market and increasing the supply of money to the banks through a buy-back, the liquidity situation is rapidly turning around.
A relaxed policy has been adopted in the debt repayment process to counter the ongoing macroeconomic challenges. This has reduced the defaulted loans in the banking sector. On the other hand, the growth of bank deposits has decreased. It is not saving the loan deposit ratio of the banks.
Globally, there are still additional risks in commodity supply systems, the report said. The central bank is also cautious to deal with the impact of this risk. Prices of some perishable commodities including fuel oil have fallen in the international market. Again, the prices of some essential products are increasing.
The Bangladesh Bureau of Statistics (BBS) has analyzed the inflation and wages report published last February and found surprising information. According to BBS data, the inflation rate is higher in rural than in urban. According to the report, the rural inflation rate is 8.80 percent; On the contrary, 8.75 percent in cities. This means that inflation in rural areas is 5.5 percent higher than in urban areas. This opposite picture of inflation has caused economists to think. Because the demand of those living in villages is low. Besides, income is also low due to less employment. Due to this, the cost is also less. After all, most agricultural products, especially vegetables, are in high supply. In fact, it is important to find an answer to the question of why the inflation rate is supposed to be low in the village due to these reasons, but it is not reflected in reality. The main question raised by the high rate of inflation in rural areas is, is it an indication of structural changes in the economy? That is, the income of the people of the village has increased. But the real picture tells us that the income has not actually increased in the village. Poverty rates are still high there; In addition, the number of very poor people is also high in villages.
However, some infrastructure is currently being built in the village, thereby increasing the flow of money there. However, most of this money is going into the pockets of the beneficiaries. The central bank report also says the same thing. According to the report, the flow of money to the village has remained the same, not increased; But the saving trend has decreased. Of course, a large part of remittances goes to villages; According to the BBS survey, 53 percent of which is used for luxury. Apart from this, the benefits of social security programs are also going more to the villages. From this, the rate of inflation in the village may increase slightly.
In fact, the increase in the rate of rural inflation is indicative of a major change, no doubt. The BBS report gives us the message that major structural changes have been completed in the economy. As a result, the condition of the village people has improved, their demand has increased, and their income has increased. But actually, it didn’t happen like that. However, there is a danger in this case – if the price of goods and services is higher in the village than in the city, the inflation rate may jump. If this is the case, it must be said that there is a big inflammation in the government’s product production and marketing management. If that is the case, then they should be identified and remedied quickly. Further, intensive research is needed to find out why the rate of inflation is higher in the cities than in the cities, even though money flow, density, demand and luxury are higher in the cities than in the villages.
The wall of discord between agreement and disagreement creates a crisis for both good and evil. The crisis has a reputation for preventing good from being good and forcing bad to get worse. In both dilemmas, good thinkers quickly withdraw from the neighborhood of good initiatives. And the neighborhood is defeated by various kinds of bad behavior. Allowing the good and the bad to live together in the same neighborhood, helping the bad to be free from pollution in the light of good, where it should be, sending the good from the paper field to the dressing room and creating a walkover environment creates a crisis for any economy, whether it is strong or weak.
In the desire for sustainable development and progress in society and the economy, all parties and affiliates have the opportunity to come to the form of inclusion instead of deviation in the urge to reach an uninterrupted and unconditional consensus. Economic inclusion as the motivation and doctrine of integrated initiatives in the development of the overall economy, as well as the philosophy of overall social inclusion, has been at the center of special consideration and extensive discussion. The philosophy of inclusion is widely considered in the industrialized world as a motivation to inspire everyone with values of solidarity in development and production across time and place and location. From poverty alleviation to eliminating wealth disparity in society and even establishing social justice, there is no dearth of interest initiatives to adopt and follow inclusion as a main issue to bring everyone under one umbrella irrespective of caste-like-religion-gender-economic status.
Our rural economy continues to play a major role in poverty alleviation. Agriculture has a great role to play in achieving food self-sufficiency. In the last five decades, the total population of the country has increased almost one and a half times. At the same time, the amount of agricultural land has decreased by about 15 percent, but the agricultural sector has not failed to provide food for the increased population, but despite repeated interruptions in agricultural production due to natural calamities, floods, cyclones, sea tides, technological development, efforts of the government and all-round efforts of farmers have played a role in combating agricultural poverty. is doing Two thirds of the total population of Bangladesh live in villages. The number of poor people overall has almost halved (24 percent) over the past three decades. The contribution of agriculture to the rural economy is a lot. One of the sectors of the rural economy is agriculture. If we do not make improvements in food grain production, fish production, poultry and cattle rearing, it would be difficult to feed large populations. From seven and a half crore people to 17 crore people, even after this, there was no problem with food. The rural economy has a great role in this. The implementation of the Sustainable Development Goals (SDGs) should accelerate the rural economy. In this case, productivity and people’s income should be increased.
We need a positive transformation of the rural economy. Several steps can be taken for this. Mechanization of agriculture should be strengthened to increase agricultural production, reduce the production cost of farmers, and increase profits. Access to machinery and technology is one of the tools to change the pace of the rural economy. There is no alternative to the use of mechanization and technology in agriculture to engage the large youth population in the villages and to connect them with the rural economy. Village youth or farmer’s children are highly educated and want to be well-groomed. Therefore, due to the increase in the use of advanced machinery and technology, they will be interested in working in the agriculture, fisheries, and poultry sectors. As a result, employment opportunities will be created.
Hiren Pandit is a columnist and researcher.