This PPT file is about recent inflation of Bangladesh.

1. Name ID
Kaiser Mahmud M1516001
Farhana Afroz M1516013
Md. Norul Basor M1516031
Nargis Akhter M1516027
Farhana Bintay Hossain M1516039
Md . Nazrul Islam M1516077

2. Topic: Inflation in Bangladesh

3.  The objective of the term paper is to analyze the condition of inflation
in Bangladesh
Objectives

4.  Inflation is defined as a sustained increase in the general level of prices
for goods and services.
 For example, if the inflation rate is 2% annually, then theoretically a $1
pack of gum will cost $1.02 in a year. After inflation, our dollar can't buy
the same goods it could beforehand.
What is inflation?

5.  Cost – Push Inflation Demand – Pull Inflation
Types of inflation

6.  Excess money supply
Inflation is always and everywhere a monetary phenomenon
Low interest rates correspond with a high level of money supply
MV = PQ
 Unemployment
There is an inverse relation between
rate of inflation and the rate of
unemployment in an economy
Causes of inflation

7.  Creditors lose and debtors gain if the lender does not anticipate inflation
correctly.
 Uncertainty about what will happen next makes corporations and consumers
less likely to spend.
 People living off a fixed-income, such as retirees, see a decline in their
purchasing power and, consequently, their standard of living.
 The entire economy must absorb repricing costs as menu costs.
 If the inflation rate is greater than that of other countries, domestic products
become less competitive.
Costs of Inflation

8.  Consumer Price Index (CPI)
 Producer Price Indexes (PPI)
The PPI indicates changes in producer prices of locally produced
commodities including exports.
How Inflation Measure?

9. The Inflation situation in Bangladesh
0
5
10
15
20
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
Inflation, average consumer prices

10. The recent inflation situation in Bangladesh
Actual Previous Highest Lowest Dates Unit Frequency
5.62 6.07 12.71 -0.02 1994-2016 Percent Monthly

11. Inflation of Food & Non-Food
3.77
8.46
3.89
8.36
0
1
2
3
4
5
6
7
8
9
Food Non Food
February,2016 March,2016

12. The Inflation in Urban & Rural Area
7.22
4.76
7.27
4.79
URBAN RURAL
February, 2016 March, 2016

13. Food inflation in urban and rural area
5.48
3.04
5.61
3.15
URBAN RURAL
February, 2016 March, 2016

14. Non-Food inflation in urban and rural area
9.14
7.97
9.12
7.82
7
7.5
8
8.5
9
9.5
Urban Rural
February, 2016 March, 2016

15. Inflation rate in SAARC Countries
7.6
9.6
7.7
4.7
9.5
11
5.1
6.8
Bangladesh India Pakistan Srilanka Nepal Bhutan Maldives Afganistan

16. Effects of inflation in the economy of
Bangladesh
An increase in the general level of prices implies a decrease
in the purchasing power of the currency. That is, when the
general level of prices rises, each monetary unit buys fewer
goods and services.

17. General effects of inflation
Purchasing power.
Uneven effect distribution of inflation in economy.
Effect on real value.

18. Positive effects of inflation
Labor-market adjustments.
Room to maneuver.
Mundell-Tobin effect.

19. Negetive effects of inflation
Cost-push inflation.
Hoarding.
Hyperinflation.
Allocate efficiency.
Shoe leather cost.
Menu costs.

20. • Short term mechanisms
a) Monetary policy
b) Fiscal policy
i. Direct tax increase
ii. Decrease in PSNCR
a) Direct wage controls
CONTROL MECHANISMS FOR INFLATION IN
BANGLADESH:
• Long term mechanisms
a) Supply

21. Fixation of prices
Interest on securities
Credit flow
Wicked syndicate and market monitory
Measures Taken by Bangladesh Government to
Reduce Inflation

22. CONCLUSION
A fall in purchasing power
Fixed-Income Receivers
Savers
Creditors(lenders)
Debtors (Brower )

23. Why does the government like inflation?

24.  Demand-Side Policy Measures
 Supply-Side Policy Measures
RECOMMENDATIONS

25. Is inflation good?