According to the latest report of the Bangladesh Bureau of Statistics (BBS), on point-to-point basis, inflation in May increased by .30 percentage point from the previous month, standing at 6.90 percent.

While the Trading Corporation of Bangladesh (TCB) in its yesterday's market report showed the prices of rice to have risen by 4 to 5.2 percent in just a month. And rice price accounts for 60 to 70 percent of the inflation.

But the prime minister in her July 10 speech in parliament accused the media of misreporting on price hike of essentials and claimed prices are within the reach of the common people.

According to a BBS report, during the end of 2001 an agricultural labourer used to earn Tk 67 a day on an average, which rose to Tk 77 during the end of 2004. His income rose by just Tk 10 in three years.

On the other hand, the TCB report put the price of coarse rice that would cost Tk 13 to 14 per kg in November 2001 at Tk 16.5 to 18 yesterday, indicating an increase of Tk 3.5 to 5 in the price range. It means, an agricultural labourer loses the rise in his income buying only two kgs of rice.

INFLATION SITUATION
Inflation has risen in both average and point-to-point basis. On a point-to-point basis, inflation in food items in May rose by .24 percentage point from the previous month, standing at 8.26 percent. In case of non-food items, the rise was.35 percentage point, standing at 4.80 percent.

On an average, inflation rose by .11 percentage point from the previous month and stood at 6.3 percent in May, overrunning the government estimate of below 6 percent inflation in fiscal year 2004-05.

Every year since the present government came to power in October 2001 inflation has persistently bumped up, and since the last fiscal year (FY) it has been increasing every month.

The point-to-point inflation was 1.66 percent in FY01, 3.58 percent in FY02, 5.03 percent in FY03 and 5.64 percent in FY04.

The government in consultation with the International Monetary Fund (IMF) set the estimated rate of average inflation for the current fiscal year at 4.5 percent. But the continued price-hike of essentials does not support the feasibility of that estimate.

PRICE REGIME
The yesterday's market report of the TCB showed rice price has increased by 17 to 19 percent and flour price by 12 percent from the same date in the last year, while the prices of pulse, potato, onion, garlic, milk and salt have increased by 9 to 60 percent.

In line with a rising price in the international market, the government also is mulling another price hike of petroleum products in the domestic market.

The depreciation of taka against dollar is making import costlier, which may be another factor for the price hike of essentials. The price of dollar to open letter of credit crossed Tk 66 yesterday.

INCOME SCENARIO
The Bangladesh Economic Review, 2005, citing the report of Poverty Monitoring Survey, 2004, said at the national level per-head monthly income increased from Tk 948 in 1999 to Tk 1,114 in 2004, marking a Tk 116 rise in the five years.

In case of the poor, the per-head monthly income rose from Tk 602 in 1999 to 631 in 2004, showing an increase of Tk 29 only.

According to the review, 52 percent of the country's labour force is engaged in the agriculture sector.

According to BBS statistics, in October 2001, a male agricultural labourer's daily wage was Tk 67 and a female's Tk 51 without food. In November 2004, a male labourer's daily wage stood at Tk 77 and a female's Tk 58.

In the industrial sectors, the average daily wage was Tk 107 to 158 for skilled labourers and Tk 85 to 106 for unskilled labourers in November 2001. By December 2004, the wage increased to Tk 129 to 240 for skilled labourers and Tk 100 to 109 for unskilled labourers.

Among them, the highest daily wage of Tk 158 in 2001 and Tk 240 in 2004 was earned by labourers in the engineering sector, where the labour force is very small.

Significantly, the rise in income at the lowest range, from Tk 107 to Tk 129, was the smallest too.