Inflation drops slightly in July

The general point-to-point inflation decreased by 0.08 percentage point to 7.48 per cent in July compared to June.

Besides, food inflation decreased by 0.18 percentage point to 8.19 per cent in the same month. However, non-food inflation rose by 0.06 percentage point to 6.39 per cent.

Planning Minister MA Mannan revealed the figures at a press conference at the secretariat on Wednesday.

Overall inflation was 7.56 per cent in June while food inflation was 8.37 per cent and non-food inflation was 6.33 per cent.

“Inflation fell as rice, edible oil, and wheat prices have gone down. Wheat shipments are coming from Russia while rice prices have not increased. Edible oil prices have decreased by Tk 18-20 in the local market. Edible oil prices have fallen in the global market as well,” Mannan said.

He said inflation would go down further as the government had given permission to import rice.

According to the Bangladesh Bureau of Statistics (BBS), the prices of flour, broiler chicken, egg, and vegetables decreased in July compared to June.

Among non-food items, the prices of bottled gas cylinders and gold fell. Due to this, overall inflation decreased.

The BBS also said the prices of potato, gourd, brinjal, ginger, garlic, green chilli, clothing, and medicine increased in July. But Horlicks, Ovaltine, powdered milk, salt, and noodles prices remained stable.

The minister said the BBS had calculated inflation based on the prices of 422 products in both rural and urban areas.

“Although it has slightly declined now, BPC is still losing Tk 100 crore daily on average. I don’t know why the increase in import costs is not reflected in the central bank’s figures,” said the official.

Moazzem said there could be three reasons behind the relatively low fuel costs. “Bangladesh gets some advantage due to long term import agreement for fuel purchase, processed fuel import has increased and direct diesel import from India has started.”

Meanwhile, import payment of intermediate goods, excluding petroleum and RMG goods, increased 63.6 per cent to $24.94 billion in FY22, compared to FY21.

Of those, import costs of fertilizer and pharmaceutical products increased 223 per cent to $4.39 billion and 308 per cent to $1.48 billion, respectively, in FY22 compared to FY21.

Even though the Covid-19 pandemic affected new investment and existing investment expansion plans in Bangladesh, the capital goods import payment increased 26.3 per cent to $16.43 billion in FY22.

Of those, capital machinery import cost was $5.46 billion and other capital goods import cost was $10.97 billion, recording 43 and 19 per cent increases, respectively, compared to FY21. Regarding this, CPD Research Director Moazzem said since exports are increasing, the import of capital goods is also increasing. The import of capital equipment for various major government projects is also increasing.