Inflation falls to 6.04pc in Oct

Inflation came down slightly to 6.04 percent in October riding on the decline in food prices, official figures showed.

Last month, general inflation decreased 8 basis points from September's 6.12 percent, according to the Bangladesh Bureau of Statistics (BBS), which released the data yesterday.

Food inflation fell 25 basis points to 7.62 percent last month after reaching a 38-month high of 7.87 percent in September. 

Prices of all varieties of rice, a key determinant of overall inflation as it accounts for 23 percent of the commodity basket in the consumer price index, went down.

In recent months, rice prices rose to record highs, reflecting the dwindling supplies following flood-induced losses to the main boro crop coupled with reduced production and imports in 2016.

About 20 lakh tonnes of boro crop were damaged this year, according to the food ministry.

In September, coarse rice price in Dhaka city was Tk 52.54 a kg in contrast to Tk 34.62 a year earlier. Similarly, price of fine rice in September was Tk 62.46 to Tk 66.30, which was Tk 53.90 to Tk 55 a year earlier.Rice prices dropped about Tk 2 a kg for all varieties of the staple in October.

Prices of pulses and sugar declined. Wheat and milk prices remained unchanged.Prices of local onion rose Tk 27 a kg in a month reaching Tk 79.24 in October, while prices of dry chillies went up to Tk 228.59 a kg. Egg prices fell. 

Among vegetables, prices of brinjal, papaya and okra decreased and potato prices remained unchanged at Tk 20 a kg.

In August 2014, food inflation was 7.67 percent and gradually decreased to below 4 percent. But from January last year, it started to creep up to more than 6 percent, crossing the 7 percent mark in May this year. It remained above 7 percent in the following five months except June.

Non-food inflation went up by 17 basis points to 3.61 percent in October from 3.44 percent a month ago, according to the BBS data.  

Inflation in rural areas also decreased to 6.14 percent from 6.21 percent a month ago, while in urban areas it went down to 5.86 percent in October from 5.95 percent.

Food inflation in both rural and urban areas declined.

Inflation decelerated to 5.44 percent in the last fiscal year, aided by prudent monetary management and weak aggregate demand. The government has set the inflation target at 5.5 percent for fiscal 2017-18.