Bangladesh to ‘cure’ inflation with subsidies as prices spike

DHAKA, June 7, 2007 (AFP) – Bangladesh’s emergency government was Thursday set to announce a slew of subsidy and welfare measures in a 12.6 billion dollar anti-inflation budget. The interim government’s finance minister, A.B. Mirza Azizul Islam, would announce the budget in a pre-recorded speech to be broadcast by radio and television stations.

The military-backed government’s first budget since coming to power on January 12 would include a number of income supplement and social protection measures to help the poor cope with the highest inflation in nine years, Islam told reporters late Wednesday.

Annual price inflation currently stands at 8.28 percent, the highest since devastating floods in 1998. At the same time, two percent agricultural growth coupled with soaring global commodity prices have taken their toll on the impoverished nation’s millions of poor.

Bangladesh is home to some 144 million people, 40 percent of whom live on less than a dollar a day.

Islam added that he would lower the duties on a number of essential commodities to tackle soaring prices.

Analysts have said the emergency government must tackle inflation head-on, or risk becoming un