Inflation has soared to its record high of 10.10 per cent on a point-to-point basis in July since the independence, with economists seeing no quick fix and calling for urgent steps to restore business confidence.

The index clocked double-digit growth on the back of increasing prices of both food and non-food items, proving measures to deal with supply-side constraints to be inadequate, they pointed out.

Food prices jumped nearly 11 per cent, while the prices of non-food items also marked significant increases in the first month of the current 2007-08 fiscal year, suggest figures, which are to be released by the official statistical agency in a day or two.

The Bangladesh Bureau of Statistics figures show the inflation kept on creeping up steadily from as low as 1.66 per cent in 2000-01 fiscal year to 9.20 in June 2007, negating the impacts expected from an extra-cautious and contractionary monetary policy pursued by the central bank for years at the instance of IMF. Point-to-point inflation was 8.05 in May 2007, 8.28 in April, 7.43 in March, 7.28 in February and 5.94 per cent in January, 2007.

The rate was 3.58 in 2001-02 and continued to go up since then, with 5.03 in 2002-2003, 5.64 in 2003-04, 7.35 in 2004-05 and 7.54 in 2005-06, according to the economic survey of the finance ministry.

‘This is for the first time since the independence that the country has experienced a double-digit inflation,’ a high official at the BBS told New Age.

Zaid Bakht, research director, Bangladesh Institute of Development Studies, said the double-digit inflation has simply proved that all efforts made by the government to contain inflationary pressure have failed.

‘The government has to lessen harassment on businessmen so that they feel encouraged to import both food and non-food items,’ the economist told New Age.

‘Besides the private sector, the government has also to import food items and ensure their smooth distribution through an efficient and effective network to contain the inflation.’

He stressed that food-aided social safety-net schemes like vulnerable group feeding must be enhanced to take care of the marginal poor, who are hardly hit by floods and more exposed to unbridled price hike of food items.

The price situation could aggravate further as fresh floods loom large and proper policy intervention is urgently needed to prevent the things from turning worse, said the economist at the government’s development think-tank.

Khondkar Ibrahim Khaled, former deputy governor of Bangladesh Bank, said he sees no immediate solution to the soaring inflation and suggested that the government should concentrate on enhancing the consumers’ purchasing power and restoring confidence of business people.

‘I don’t find any quick-fix solution to the menace of inflation, but its impacts could be minimized by taking measures which will raise people’s incomes and restore confidence in business people,’ Khaled told New Age.