Bangladesh's central bank raised its inflation forecast for the 2010/11 fiscal year to 7 percent from 6.5 percent, largely because of higher food prices. Inflation in the 2009/10 year to end-June was 7.31 percent, above the bank's target of 6.5 percent.
Inflation has picked up due to a spike in global food prices on the back of adverse weather in various regions, central bank governor Atiur Rahman said on Sunday while unveiling monetary policy for the January-June period.
He said the central bank would keep monetary policy accommodative to spur growth. "Bangladesh is on track to achieve a record 6.7 percent economic growth in the fiscal year and it is possible to attain a 7 percent growth in the next fiscal year," he told a news conference.
The economy grew 5.8 percent in the 2009/10 fiscal year. Rahman also said he was concerned high oil prices, nearing $100 a barrel due to growing demand resulting from global economic recovery, were widening the impoverished country's trade deficit. Export earnings of $18.5 billion and around $11 billion in remittances have been targeted in the current fiscal year to boost foreign inflows into the $90 billion economy.