Inflation drops to single digits
Inflation slowed to single digits on a point-to-point basis in April, for the first time in 13 months, thanks to a drop in rice prices.
Overall inflation fell by 0.17 percentage point to 9.93 percent last month from 10.10 percent in March, according to Bangladesh Bureau of Statistics (BBS).
Inflation had jumped to double digits in March last year and continued thus for 13 months.
BBS Director General M Shahjahan Ali Mollah released the latest data yesterday at his office.
According to BBS data, food inflation decreased by about 0.20 percentage point compared to March and stood at 8.12 percent.
Non-food inflation fell by 0.19 percentage point over the same period and reached 13.77 percent in April.
Mollah told journalists that non-food inflation decreased and the purchasing capacity of people got a boost. Although prices of egg and aromatic rice increased slightly, those of coarse and fine rice marked a fall.
This is why, inflation fell in April, added Mollah.
Mustafizur Rahman, executive director of Centre for Policy Dialogue, told The Daily Star that, with the boro harvest, the food inflation would decrease. He, however, said non-food inflation might not come down as once it shoots up it does not show the tendency to fall.
He said the International Monetary Fund (IMF) had imposed a condition on the government to hike prices of fuel and electricity and the government was also considering it. As a result, non-food inflation would be on the rise.
According to Trading Corporation of Bangladesh (TCB) report, prices of all kinds of coarse rice remained steady on April 30 compared to a month ago. However, the prices of fine rice fell by 1 to 3 percent on that day from the same day the previous month.
The same time prices of flour and loose soybean oil fell by 1 to 1.5 percent compared to their prices a month ago. But the prices of various pulses, garlic and onion increased by 3 to 30 percent over this time. Price of potato also rose by about 61 percent.
Officials of Bangladesh Bank (BB) said the boro harvest had started and would continue for about two months. As a result, the possibility of a rise in inflation over the next couple of months was very slim, they added.
A high official of the central bank said the government and the BB's target of bringing down inflation to single digits in the current fiscal year depends on how much inflation decreases on a point-to-point basis.
According to BBS data, urban people spend more on essentials than rural people do, as inflation is still in the range of double digits in the urban areas.
In April, the overall inflation in the rural areas was 9.21 percent, which was 11.77 percent in the urban areas where food price is higher.
In urban areas, food inflation was 10.72 percent, which was 7.01 percent in the rural areas.
Mollah of the BBS said economy of every country experiences inflation to some level. What needed to be considered was whether the purchasing power of people has increased.
He said inflation rose by more than 9 percent but wage rate went up by 13.63 percent in April.
According to Mustafizur Rahman of the CPD, wage goes up when inflation increases, but the people of fixed income bracket do not get the benefit.