Inflation proving difficult to tame: Planning adviser

The interim government is finding it difficult to bring down inflation despite it being the administration's goal to maintain overall stability in the country, Planning Adviser Wahiduddin Mahmud has said.  

Remittance inflows are increasing, balance of payments has stabilised, but inflation is not coming down, the adviser said at a media briefing following a meeting of the Executive Committee of the National Economic Council (Ecnec) today.

"Reducing inflation is not the same as reducing prices. For instance, while the price of potatoes is high, if it stabilises at that level, inflation for potatoes would be zero. Once prices increase globally, they rarely decrease significantly," he said. 

Ten projects with a total estimated cost of Tk1,974.30 crore were approved at the Ecnec meeting held at the Planning Commission. Of this, Tk1,642.98 crore will be funded by the government, while Tk331.32 crore will come from the respective organisations' own resources.

At the briefing, the adviser mentioned that the preparation of the revised budget for the current fiscal year is being expedited to ensure economic stability. 

"The process is expected to be completed by the end of January or February," he said, noting that an earlier revised budget would help all institutions align their policies.

"The central will better know how far its contractionary policies should go, the finance ministry will determine budget deficit levels, and the planning ministry will identify projects that need to be fast-tracked," he said.

Addressing government spending, he highlighted that meeting various demands, including salaries and allowances for public sector employees, continues to exert pressure on the budget. 

"Reducing expenditures in the revenue budget is challenging, which in turn increases the pressure to cut development spending," he added. 

Despite this, he argued that a smaller development budget does not significantly harm short-term growth, as production capacity improvements can sustain progress even if large investments are temporarily paused.

The 10 projects

Among the approved projects is the Ministry of Shipping's initiative to construct river ports in the Chilmari area, which includes Ramna, Joragach, Rajibpur, Roumari, and Nayarhat.

The Ministry of Agriculture received approval for two projects: the Ashuganj-Palash Green initiative and the Sustainable Agricultural Technology Expansion project in the Cumilla region.

The Ministry of Environment, Forest and Climate Change's project for felling economically senescent rubber trees, re-afforestation, and modernisation of rubber processing also received the green light.

The Ministry of Power, Energy, and Mineral Resources secured approval for three projects: the collection and installation of a 60 MMSCFD capacity process plant for the Bhola North Gas Field, the drilling of the Rashidpur-11 exploration well, and a 2D seismic survey over exploration blocks 7 and 9.

Regarding the projects, Adviser Wahiduddin Mahmud said while LNG imports and coal received attention in the past, the exploitation of gas reserves in places like Bhola and Sylhet had been overlooked. 

He said, "If Bangladesh Petroleum Exploration and Production Company (Bapex) had been involved, the process could have been more efficient. However, Bapex lacks the necessary capacity, which must be addressed, possibly by involving international third parties in exploration and extraction activities."

The Ministry of Women and Children Affairs will establish 60 day-care centres under another approved project, while the Ministry of Railways obtained approval for two initiatives aimed at rehabilitating and upgrading level crossing gates in the eastern and western regions of Bangladesh Railway.

In addition to these approvals, Ecnec members were informed about six projects recently endorsed by the planning adviser.

The meeting also addressed concerns about the Bangabandhu Sheikh Mujib Safari Park project in Moulvibazar. After reviewing findings that highlighted its potential adverse impact on the biodiversity of the Lathitila forest, Ecnec approved the cancellation of the project.

Several advisors, including those overseeing finance, commerce, environment, and water resources, along with senior officials, were present at the Ecnec meeting.