Last update on: Sun Mar 16, 2025 02:30 PM
Hikes in gas prices are likely to adversely impact the inflation scenario—particularly that of non-food items—warned the Centre for Policy Dialogue (CPD) today.
The caution comes as consumer prices, despite easing in the last two months, have stayed over 9 percent for the 24th month in a row, eroding purchasing capacity, especially for low-income households.
The Bangladesh Energy Regulatory Commission last month proposed increasing gas prices for new industries to Tk 75.72 per cubic metre, up from the current Tk 30, which drew widespread opposition.
CPD said prolonged high inflation for about three years has caused widespread suffering.
At this stage, if the proposal to hike gas prices is accepted, it is likely to adversely impact the inflation scenario. The uncertainty in the global economy owing to the tariff war might add to this, said its Executive Director, Fahmida Khatun, at a media briefing at its office.
The Bangladesh Bank’s target to contain inflation within a 7-8 percent range by end-June 2025 is likely to be missed if the aforementioned dynamics unfold, said the CPD.
The think tank organised the briefing to share its recommendations for the fiscal year (FY) 2025-26.
The CPD said the national budget for FY26 holds significant importance as it is being formulated by the interim government amid a challenging macroeconomic environment.
“The interim government inherited an economy characterised by high inflation, subdued revenue collection, sluggish budget implementation, a liquidity crunch in the banking sector, and declining foreign exchange reserves.”
“The lower momentum in export earnings and remittance inflows has further exacerbated economic vulnerabilities.”
Under the circumstances, restoring macroeconomic stability remains the foremost concern for policymakers, it said.
“This requires targeted interventions to address inflationary pressures, stabilise the exchange rate, and ensure fiscal prudence.”
Khatun said the budget must prioritise the protection of vulnerable and disadvantaged groups and economic recovery.
The CPD said the FY26 budget will probably be the only budget formulated by the current interim government under new leadership at the finance ministry.
“In this context, the upcoming national budget presents a unique opportunity for the interim government to move beyond conventional approaches, implement short-term corrective measures, and establish the groundwork for medium-term reforms in resource mobilisation, public finance management, and expenditure efficiency.”
“A crucial first step in this process would be the development of a credible and well-structured fiscal framework,” it said.
