Reflection Paper Reasons Which May Explain the Current Level of Inflation in Bangladesh

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Reasons which may explain the current level of inflation in Bangladesh Although historically Bangladesh never had that much of inflation because the economy was a bit sluggish after the independence war, but for the past four- five years the rate of inflation has gone up especially in the food market (which is almost 20%). I think the inflation that we see now in Bangladesh is mostly cost-push inflation and built-in inflation. Since a lot of things in Bangladesh is imported, (for example Bangladesh imports a lot of food stuff from India) therefore if the price of the products being imported is increased in India then Bangladesh would have to increase it too. Also, since we import oils and other input products are imported and since these prices has gone up in their region so Bangladesh needs to increase their prices accordingly which in turn adds to cost-push inflation. Since Bangladesh is a small open economy it does not have the power to influence the global market since we have a smaller population compared to the other big open economy countries. Also cartels like OPEC have a big role to play in the high price of oils which is affecting us a lot. A lot of people believe that a lot of private cartels are responsible for the increased price of food in Dhaka because we get it a lot cheaper in the country side, although this might be true I do believe that the reason the price goes up in Dhaka is because most of the food is actually coming from the surrounding country-side and villages, and we forget that in order to bring the food here the farmers need the travel expenses not to mention they sometimes even need to bribe the policemen. This can be one of the reasons why the price is more in the city. Some inflation is always good, but if inflation in Bangladesh kept rising like this we would have a problem. The rich get richer but poor and the lower middle class people are the one’s suffering because of this. In my opinion Bangladesh should try to keep its...
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