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The food inflation has decreased in the world, including neighbouring India, but it is on the rise in Bangladesh.
The food inflation increased to 9.73 per cent in June this year from 9.24 per cent in May, showed the data released by Bangladesh Bureau of Statistics (BBS) in its Consumer Price Index (CPI) update for June on Monday.
Despite the increase in food inflation, BBS said the point-to-point general inflation has dropped in June compared to May. The state-run agency said the average inflation decreased to 9.74 per cent in June from an 11-year high of 9.94 per cent in May.
It means that a person, who used to buy goods and services for Tk 100 in June 2022, has spent Tk 109.74 to buy the same goods in June this year. In other words, the cost has increased by Tk 9.94 within a year.
The food prices are falling across the world but rising in Bangladesh. This means that the fall in food prices in the world market has put no impact in Bangladesh, said Mahfuz Kabir, Research Director at Bangladesh Institute of International and Strategic Studies (BIISS).
“The problem lies with our own market management. The commerce minister also acknowledged the syndicate in the market, but the problem is that he is not taking action. So, the inflation is not coming down. In order to reduce inflation, the government's commitment to the people must be implemented,” he added.
According to BBS, the inflation rate in the food sector was 9.24 per cent in May compared to 8.84 per cent in April. As a result, the prices of food products increased substantially in May compared to April.
BBS said the prices of rice, pulses, edible oil, salt, fish, meat, vegetables, spices and tobacco products have increased and the rate of food inflation has increased. Inflation is now 9.82 per cent in rural areas and 9.45 per cent in urban areas, the BBS data showed.
The prices of housing, furniture, household goods, healthcare, transports and education materials have fallen slightly, BBS says. The inflation rate dropped slightly to 9.60 per cent in June from 9.96 per cent in May.
The inflation rose to 8.78 per cent in February and to 9.33 per cent in March. Inflation eased slightly in April but was not at satisfactory level. At that time, the general inflation rate was 9.24 per cent.
The economists had recommended that the government gives top priority to controlling inflation in the recently-passed budget for the FY24. But the budget unveiled on June 1 had not taken major initiatives to control inflation, say multiple private think-tank including Center for Policy Dialogue.
The inflation rate has been increasing since the beginning of the outgoing fiscal year. The BBS reported that the average inflation in the just-concluded fiscal year stood at 9.02 per cent.
The government often blames the rise in the prices of goods in the international market for the increase in inflation. However, even though the prices of various daily commodities have decreased in the global market, it put no impact in the Bangladesh market. Importers mainly blame the dollar and LCs opening crises for imports.
According to a report published by the Guardian on July 2, the inflation rate of the euro zone is decreasing due to the fall in the price of fuel oil. The annual rate of inflation in the 20 countries using the euro currency was 5.5 in June. In May, this rate was 6.1.
In the context of Ukraine-Russia war, the government hiked the price of fuel oil by 40 per cent in August last year which hit all types of commodity prices. In actual market experience, the price of the industrial product which was Tk 20 in July 2022 has become close to Tk 35 in July 2023.
In addition, economists believe that commodity prices are increasing due to strong business syndicates, and lack of government control over the market.
Various studies related socio-economy show that the condition of low income people is getting worse due to high inflation. The urban poor are hit hard by soaring inflation.
BSS says due to the increase in the prices of all kinds of goods, the mass people have cut spending on non-food items. The studies have also revealed that many families have excluded fish and meat from their meal.
