Food prices push inflation up again

After a steady fall for two months, inflationary indexes started rising in May with an increase in food prices especially rice.
In May, inflation stood at 8.65 percent, up from its previous figure by 0.11 points.
According to data of the Bangladesh Bureau of Statistics (BBS), food inflation rose 0.25 percent to 10.72 while non-food inflation went down to 5.34 percent after a decrease of 0.12 percent in May.
In the last fiscal year, the government had a target of containing inflation, on average, within 6.5 percent, but in May, inflation stood at 6.78 percent.
Inflation started increasing from July last year and reached 9.06 percent in February this year. But from March it started falling.
A high official of Bangladesh Bank (BB) said price hike of rice is the main reason behind the rise in inflation.
Though boro crop started coming on the market in May, the prices of rice went up.
According to a report of Trading Corporation of Bangladesh, in May this year, prices of different varieties of rice were 18 to 32 percent up in comparison with May last year.
The BB official said that even a slight increase in the prices of rice makes the lives of the poor tougher.
A Bangladesh Bank Monetary Policy Statement (MPS) released last month reads “Even a moderate rise in inflation (particularly in the food prices) attracts concern disproportionate with their macro-economic significance, because gains from inflation go to the affluent while the pains go to the low income population”.
The MPS also reads that upward revision of prices of gas, fuel, oil and power is the likely main cause for domestic inflation in Bangladesh in the current fiscal year.
However, in the MPS the central bank gave assurance that various steps would be taken to contain inflation.
The BB in the MPS recommended that the government take different measures to keep inflation in check.
It said the government needs to remain proactive in facilitating and enforcing orderly functioning of wholesale and retail markets and supply chains.