Inflation rose 10 basis points to 5.62 percent in July as both food and non-food prices moved upwards.
In June, inflation was 5.52 percent, down 11 basis points compared to the previous month, because of a decline in both food and non-food prices.
Planning Minister MA Mannan released the monthly consumer price index report of the Bangladesh Bureau of Statistics at the National Economic Council in Dhaka yesterday.
He said the inflation slightly increased in the first month of the fiscal year as prices of vegetables rose because of heavy rains and floods in the rural areas.
The floods and rains hampered production and disrupted the supply chain.
Besides, people bought more products in Eid-ul-Azha, pushing up the price of both food and non-food items.
Food inflation was up two basis points from 5.40 percent in June to 5.42 percent in July, while non-food inflation rose to 5.94 percent last month, up 23 basis points from 5.71 percent a month ago.
Zahid Hussain, a former lead economist of the World Bank Bangladesh, said floods were likely to have caused the increase in food inflation in July relative to June, while implementation of the new VAT law and the upward revision in gas prices contributed to the rise in non-food inflation both relative to June 2019 and July 2018.
He said a very strong growth in remittance in July is likely to have boosted demand pressure on both food and non-food inflation.
The spending on the occasion of Eid-ul-Azha added about Tk 40,000 crore to the economy, up 29 percent year-on-year.
About Tk 28,687 crore came from cattle sales and the remaining Tk 15,000 crore through the sales of commodities, refrigerators, freezers, clothing and furniture alngside transportation and tourism.
This expenditure hit the inflation in July, according to a BBS statement.
Vegetables became significantly pricier throughout July largely due to inundated farmlands.
Green chili was sold at Tk 180 to Tk 200 a kg at kitchen markets in the capital last month, up from Tk 70 to Tk 90.
Prices of onion and garlic were up by Tk 10 to Tk 30 per kg.