Inflation eases in Dec

Inflation came down to 5.83 percent in December, from 5.91 percent a month ago, riding on a decline in non-food prices, according to Bangladesh Bureau of Statistics.

Planning Minister AHM Mustafa Kamal yesterday released the data for November and December.

In December food inflation increased slightly but as non-food inflation decreased, the overall inflation fell.

Food inflation in December rose by 4 basis points and stood at 7.13 percent. But in November it fell by 53 basis points to 7.09 percent.

Food inflation went down by 25 basis points to 7.62 percent in October after hitting a 38-month high of 7.87 percent in September.

Food inflation declined for three months in a row but in December it increased as rice prices went up.

Prices of many other essential commodities, including onion, also marked a rise stoking the inflation rate. 

According to Trading Corporation of Bangladesh data, coarse rice sold for Tk 44 to Tk 46 per kilogramme in Dhaka yesterday -- a rise by 5.88 percent from a month back and by 23 percent from a year ago.

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

In September, coarse rice price in Dhaka city was Tk 52.54 a kg in contrast to Tk 34.62 a year earlier.

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. It remained above 7 percent in the following five months except June.

According to BBS data, food inflation in rural areas rose by only 1 basis point to stand at 7.08 percent. However, in urban areas inflation increased by 7 basis points to 7.22 percent.

When asked whether the BBS data reflected the real picture of the rise in food prices, Kamal said the BBS conducted the survey and prepared the inflation data on the basis of living index throughout the country.

The prices of rice and onion increased and this reflected in the overall index.

The minister said, from October to December, general inflation was 5.93 percent whereas it was 5.32 percent in the same period last year.

Non-food inflation went down by 25 basis points to 3.85 percent in December from 4.10 percent a month ago, according to the BBS data.

But in November, non-food inflation went up by 49 basis points compared to that in October.

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. Non-food inflation in December fell in both rural and urban areas.

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.