Inflation inches up

Inflation went up 11 basis points to 6.36 percent in July, compared to the previous month, on the back of a non-food price increase.

The figure was announced less than a week after Bangladesh Bank admitted it would face challenges in bringing down inflation to 6.2 percent, the government's target for the current fiscal year.

The concerns over inflation prompted the regulator to keep the policy rates unchanged.

Food inflation went down 25 basis points to 6.07 percent in the first month of the current fiscal year, compared to June, while non-food inflation increased 65 basis points to 6.8 percent, according to Planning Minister AHM Mustafa Kamal who released the data yesterday.

“The price hike of non-food items is responsible for the latest rise in inflation,” he said. In June, overall inflation fell by 79 basis points, compared with the previous month, to stand at 6.25 percent.

The planning minister said people spent more on non-food items than the food items during Eid-ul-Fitr last month.

Bangladesh Bank last week released the Monetary Policy Statement for the first half of the fiscal year where the main focus was on controlling inflation.

Some economists suggested loosening the policy slightly to boost investment and recommended increasing the private sector credit growth target to convince investors to pour more money into their projects.

The central bank aims to achieve the private sector credit growth target of 15 percent by June next year, while the target was 15.5 percent in last June.

The repo and reverse repo rates have been kept unchanged at 7.25 percent and 5.25 percent respectively.

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