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Inflation & Bangladesh Economy
- 1. BY GROUP 8
- 2. Group Members Nusrat Sharmin Faisal Jahan Shanewaz Parvez Rifat
- 3. Inflation… A term used in Economics. When a rise in the general level of prices of goods and services in an economy over a period of time is known as Inflation. If general price level rises, each unit of currency buys fewer goods and services. Often triggered when demand for goods is greater than the available supply or when unemployment is low and workers can command higher salaries. Inflation also reflects erosion in the purchasing power of money.
- 4. What Is Inflation?? The rate at which the general level of prices for goods and services is rising called Inflation. A price level is a hypothetical measure of overall prices for some set of goods and services. Typically, a price level is approximated with a price index.
- 5. Inflation
- 6. Inflation Method of calculation (continued) Example: In January 2007, the U.S. Consumer Price Index was 202.416, and in January 2008 it was 211.080. The formula for calculating the annual percentage rate inflation of 2007 is Inflation (year-on-year) in the United States from 1914 to 2010.
- 7. Inflation Effects of Inflation General effects: • An increase in the general level of prices implies a decrease in the purchasing power of the currency. • General level of price rises, each unit currency buys fewer goods and services. • Inflation can not be distributed evenly in the economy.
- 8. Inflation Negative effects: • Decrease in the real value of money. • Unpredictable inflation rates. • Discourage investment and savings. • Add inefficiencies in the market. • Difficulties with budget and long-term planning for companies. • Hidden tax increase. • Demand of rapid wage increase • Causes Hyperinflations.
- 9. Inflation Positive effects • Labor market adjustments. • Ensures the central bank to adjust nominal interest rates • Tobin effect, “A moderate level of inflation can increase investment in an economy leading to faster growth or at least higher steady state level of income”.
- 10. Economic Condition of Bangladesh Present Scenario of Bangladesh Economy: GDP - Composition by Sector Agriculture 18% Service Industry 53% 29%
- 11. Economic Condition of Bangladesh 6.71(FY 2011-12) 6.31(FY 2010-11) GDP Growth
- 12. Economic Condition of Bangladesh Positive Growth of GDP Exports Decreased Imports Increased Interest Rate Increased
- 13. Economic Condition of Bangladesh • Inflation is recorded at 9.15 percent in May of 2012
- 14. Major causes of inflation Excess money supply Quantity theory of money MV = PQ Where M = the nominal quantity of money V = the velocity of money in final expenditures P = the general price level Q = an index of the real value of final expenditures Unemployment Phillips curve showed that unemployment and inflation shared an inverse relationship
- 15. REASONS BEHIND INFLATION IN BANGLADESH Inflation can happen when governments print an excess of money to deal with a crisis. As a result, prices end up rising at an extremely high speed to keep up with the currency surplus. This is called the demand-pull, in which prices are forced upwards because of a high demand Excess money borrows by Government from central bank The overall food price Exchange rate fluctuations Growth of money supply Increased inflow of workers’ remittances
- 16. Food Inflation Non-Food Inflation Transmission mechanism of Exchange rate fluctuations foreign exchange reserves
- 17. Controlling Inflation • Monetary policy: High interest rates and slow growth of the money supply are the traditional ways through which central banks fight or prevent inflation Keynesians emphasize reducing aggregate demand during economic expansions and increasing demand during recessions to keep inflation stable.
- 18. Controlling Inflation Fixed exchange rate: • Under a fixed exchange rate currency regime, a country's currency is tied in value to another single currency or to a basket of other currencies (or sometimes to another measure of value, such as gold). • A fixed exchange rate is usually used to stabilize the value of a currency, vis-a-vis the currency it is pegged to.
- 19. Controlling Inflation • Wage & price control: • Wage and price controls are regarded as a temporary and exceptional measure, only effective when coupled with policies designed to reduce the underlying causes of inflation during the wage and price control regime.
- 20. Controlling Inflation Additional Policies: • If Bangladesh could indeed bring about positive fruits from its export of garments to India • If the foreign remittance flow pour in regularly and satisfactorily • If infrastructural development is done as per plan • If utility services, like power, gas and energy could be ensured adequately • If proper investment from abroad, and local entrepreneurs could be achieved.
- 21. Conclusion • We strongly feel that it is high time for the policy makers of the government of Bangladesh and its central bank to come forward with pro-active and forward-looking fiscal and monetary policies and take drastic steps to control and contain the double-digit inflation. It is an appropriate time to enforce "austerity measures" by cutting unproductive and administrative expenditure of the government departments, stabilize the price level by not increasing the energy and fuel costs.
- 23. Question Time
Hinweis der Redaktion
- Rotating tubes with text(Intermediate)To reproduce the first shape effect on this slide, do the following:On the Home tab, in theSlides group, click Layout, and then click Blank.On the Insert tab, in the Illustrations group, click Shapes, and then under Rectangles click Rectangle (first option from the left). On the slide, drag to draw a rectangle.Select the rectangle. Under DrawingTools, on the Format tab, in the Size group, do the following: In the ShapeHeight box, enter 0.75”.In the ShapeWidth box, enter 7.42”.Drag the rectangle above the middle of the slide, and then align the right edge with the right edge of the slide.Under DrawingTools, on the Format tab, in the ShapeStyles group, click ShapeEffects, point to Reflection, and then under ReflectionVariations click TightReflection, touching.On the Home tab, in the bottom right corner of the Drawing group, click the Format Shape dialog box launcher. In the Format Shape dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following:In the Type list, select Linear.In the Direction list, select LinearUp (second row, second option from the left).Under Gradient stops, click Add gradient stop or Remove gradient stop until four stops appear in the slider.Also under Gradient stops, customize the gradient stops as follows:Select the first stop in the slider, and then do the following:In the Position box, enter 0%.Click the button next to Color, and then under ThemeColorsclick Blue, Accent 1, Lighter 40%(fourth row, fifth option from the left).Select the next stop in the slider, and then do the following: In the Position box, enter 26%.Click the button next to Color, and then under ThemeColorsclick White, Background 1, Darker 5% (second row, first option from the left).Select the next stop in the slider, and then do the following:In the Position box, enter 80%.Click the button next to Color, and then under ThemeColorsclick Black, Text 1, Lighter 50% (second row, second option from the left).Select the last stop in the slider, and then do the following: In the Position box, enter 100%.Click the button next to Color, and then under ThemeColorsclick White, Background 1, Darker 35% (fifthrow, first option from the left).Also in the FormatShape dialog box, click LineColor in the left pane. In the LineColor pane, select Noline.Also in the FormatShape dialog box, click Shadow in the left pane. In the Shadow pane, click the button next to Presets, under Outer click OffsetCenter, and then do the following:In the Transparency box, enter 60%.In the Size box, enter 102%.In the Blur box, enter 5 pt.In the Angle box, enter 0°In the Distance box, enter 0 pt.On the slide, select the rectangle. On the Home tab, in the Clipboard group, click the arrow to the right of Copy, and then click Duplicate.Select the second, duplicate rectangle. Under DrawingTools, on the Format tab, in the ShapeStyles group, click ShapeEffects, point to Reflection, and then click NoReflection.On the Home tab, in the bottom right corner of the Drawing group, click the FormatShape dialog box launcher. In the FormatShape dialog box, click Fill in the left pane. In the Fill pane, click the button next to Direction, and then click LinearDown (first row, second option from the left).Also in the FormatShape dialog box, click Shadow in the left pane. In the Shadow pane, click the button next to Presets, and then under NoShadow click NoShadow.On the slide, drag the second rectangle until it is directly on top of the first rectangle.On the Home tab, in the Editing group, click Select, and then click Selection Pane.In the Selection and Visibility pane, press and hold CTRL, and then select both rectangles. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following:Click Align Selected Objects.Click Align Center.Click Align Middle. To reproduce the first text effect on this slide, do the following:On the Insert tab, in the Text group, click TextBox. On the slide, drag to draw a text box.Enter the first line of text on the slide, and then select the text. On the Home tab, in the Font group, do the following:In the Font list, select Trebuchet MS.In the FontSize box, enter 26.Click Bold.Click the arrow next to FontColor, and then under Theme Colors click Black, Text 1, Lighter 25% (fourth row, second option from the left)On the Home tab, in the Paragraph group, click AlignTextLeft to align the text left in the text box.On the slide, select the text box. Under DrawingTools, on the Format tab, in the WordArtStyles group, click TextEffects, point to Shadow, and then click ShadowOptions. In the FormatTextEffects dialog box, in the Shadow pane, click the button next to Presets, under Inner click Inside Diagonal Bottom Left (third row, first option from the left), and then do the following:Click the button next to Color, and then under Theme Colors click White, Background 1 (first row, first option from the left).In the Transparency box, enter 21%.In the Blur box, enter 5 pt.In the Angle box, enter 90°.In the Distance box, enter 4 pt.On the slide, drag the text box onto the second (top) rectangle. To animate the first shape and text effects on this slide, do the following:In the Selection and Visibilitypane, select the third object in the list (the first rectangle you created). On the Animations tab, in the Advanced Animation group, click Add Animation, and then under Entrance click Float In.Also on the Animations tab, in the Animation group, click Effect Options, and then click Float Down.Also on the Animations tab, in the Timing group,do the following:In the Start list, select WithPrevious.In the Duration box, enter 1.00 second.In the Selection and Visibility pane, select the second object in the list (the second rectangle you created). On the Animations tab, in the Advanced Animation group, click Add Animation, and then under Entrance click Fade.Also on the Animations tab, in the Timing group, do the following:In the Start list, select AfterPrevious.In the Duration box, enter 1.00 second.In the Selection and Visibility pane, select the first object in the list (text box). On the Animations tab, in the Advanced Animation group, click Add Animation, and then under Entrance click Wipe.Also on the Animations tab, in the Animation group, click Effect Options, and then click From Top.Also on the Animations tab, in the Timing group, do the following:In the Start list, select WithPrevious.In the Duration box, enter 1.00 second.To reproduce the other animated shapes and text on this slide, do the following:Press and hold CTRL, and then in the Selection and Visibility pane, select the two rectangles and the text box. On the Home tab, in the Clipboard group, click the arrow to the right of Copy, and then click Duplicate.With the second group of objects still selected on the slide, drag them under the first group of objects, aligning the right edge of the rectangles with the right edge of the slide.With the second group of objects still selected on the slide, on the Home tab, in the Clipboard group, click the arrow to the right of Copy, and then click Duplicate.With the third group of objects still selected on the slide, drag them under the second group of objects, aligning the right edge of the rectangles with the right edge of the slide.Click in the second and third duplicate text boxes and edit the text.To reproduce the background effects on this slide, do the following:Right-click the slide background area, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following:In the Type list, select Radial.Click the button next to Direction, and then click From Center (third option from the left).Under Gradient stops, click Add gradient stop or Remove gradient stop until two stops appear in the slider.Also under Gradient stops, customize the gradient stops that you added as follows:Select the first stop in the slider, and then do the following:In the Position box, enter 0%.Click the button next to Color, and then under Theme Colors click White, Background 1, Darker 50% (fifth row, first option from the left).Select the last stop in the slider, and then do the following: In the Position box, enter 100%.Click the button next to Color, and then under Theme Colors click Black, Text 1, Lighter 5% (fifth row, second option from the left).