CPD urges coordinated monetary, fiscal policies to tame inflation

Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), has urged a coordinated approach combining monetary and fiscal policies to tackle inflation, warning that isolated policy measures will not effectively contain rising prices.

She said the current inflationary pressure is mainly driven by supply-side constraints rather than demand-side factors.

She stressed the need to increase the supply of essential commodities and maintain a smooth distribution network.

She made the remarks while delivering the opening address at a roundtable titled "Looking into Bangladesh's Development: Priorities for the Newly Elected Government in the Short and Medium Term," held in Dhaka on Wednesday.

The event was jointly organised by CPD and The Daily Star.

Rashed Al Mahmud, Finance and Planning Adviser to the  Prime Minister, attended as the chief guest.

Saying that Bangladesh is an import-dependent economy, Fahmida said exchange rate stability is necessary to prevent imported inflation from feeding into domestic prices.

She also highlighted the need to strengthen market monitoring and competition enforcement to prevent hoarding and collusive practices.

The CPD executive director suggested expanding social protection programmes for low-income and vulnerable groups through targeted cash transfer schemes and essential commodity support, describing government initiatives such as family cards and pharma cards as positive steps in that direction.

On private sector development, she emphasised ensuring affordable and timely access to finance, particularly for export-oriented industries and small and medium enterprises (SMEs). She also called for increased investment in infrastructure and technology adoption to improve the business environment, adding that regulatory frameworks must be made more transparent and predictable. Policy continuity and political stability, she said, are essential to attract both domestic and foreign investment.

Also speaking at the event, Daily Star Editor and Publisher Mahfuz Anam said policy success ultimately depends on effective implementation. He noted that even well-designed policies often fail when administrative execution is weak, and that bureaucratic processes sometimes create barriers instead of facilitating service delivery.

Anam pointed to project implementation delays as a major concern, observing that projects planned for five years often take seven to eight years to complete, significantly driving up costs. He called for administrative digitalisation across all ministries and government units to improve efficiency and reduce waste.

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