The country’s overall inflation eased slightly to 9.41 per cent last December, compared to 9.49 per cent recorded in November 2023. The December figure is the lowest posted in the last eight months.
Meanwhile, food inflation on a rural-urban basis fell below 10 per cent in December, but non-food inflation picked up slightly, shows latest statistics released by the Bangladesh Bureau of Statistics (BBS).
Last month, food price inflation in villages was 9.66 per cent. In contrast, food price inflation in the urban areas was 9.46 per cent. The figures indicate that food inflation is higher in villages than in cities, though villages are the hubs of crop production.
Across the country, the situation regarding prices of food in markets, especially the winter vegetables, is however a bit different as they are not available at cheaper prices even though the vegetable production usually peaks during the winter.
BBS data shows that overall food inflation was 9.58 per cent last December. This inflation was 10.76 per cent in November. Food price inflation was 12.56 per cent in October, the highest in nearly 12 years.
According to BBS data, overall inflation in the country was 9.93 per cent and 9.49 per cent respectively in October and November. As such, the overall inflation has decreased slightly in December.
Overall inflation in rural areas was 9.48 per cent in December, while it was 9.15 per cent in urban areas.
Inflation puts pressure on the purchasing capacity of people from all financial segments. A slight drop in food inflation means that the burden of running a household for the poor and middle class has eased slightly.
But in reality, the prices of some essential commodities such as rice, flour, sugar, pulses, onions, soybean oil, and potatoes are still high in the market.
BBS says the overall non-food inflation in the country increased slightly last month. Non-food inflation was 8.52 per cent in urban-rural categories in December which was 8.16 per cent in November.
The non-food inflation was almost equal in urban and rural areas in December – 8.41 per cent in rural areas and 8.39 per cent in urban areas.
Zahid Hussain, former lead economist at the World Bank's Dhaka office thinks that the slight drop in the food inflation is not enough. “December is called the month of harvest as the production of rice and vegetables become high.
“But compared to production, the food inflation drop is nominal. If vegetable prices cannot be reduced in winter, they will rise drastically again in the dry season. For non-food items, the prices are going up due to the dollar crisis.
The situation will not improve until this crisis cannot be mitigated, he added.
Hussain then pointed out, “Market management will be a key factor behind price fluctuations. There are some big traders, the market players, who, we saw, were hiking the prices of selected commodities overnight.
“This is not because of sudden price hikes in the international market or an increase in demand. They do it to bag some easy money. Even if they reduce the price after some days following government monitoring, the base price never comes down to the previous level.”
This economist recommended monitoring the big players, as well as the middlemen, to stop such sudden instability in commodity prices.
Hussain said, “For crops and other locally produced food products, there is enough competition among the growers – the farmers. They cannot demand high prices all of a sudden. So, if the authorities can monitor big players, the prices will be stable.
“A tightened monetary policy should be kept in place until the inflation is contained.”
