The inflation rate in Bangladesh dropped by 0.29 percentage points to 9.63 per cent in September from 9.92 per cent in the previous month, according to the Bangladesh Bureau of Statistics (BBS) data.
The data, released on Tuesday, showed that the food and non-food inflation also dropped slightly in September. It dropped from 12.54 per cent to 12.37 per cent and 7.95 per cent to 7.82 per cent respectively.
From January to August this year, May saw the highest general inflation rate of 9.94 per cent. It was 9.92 per cent in August, the second highest.
The country has been facing significant inflationary pressure since the previous fiscal year, primarily attributed to the Russia-Ukraine war, which led to soaring global market prices, coupled with domestic USD supply challenges. Although global prices have now remained stable, Bangladesh has been struggling to control the inflation.
The government has set a target of keeping inflation at an average of 6 per cent in the FY24 budget but they are yet to put any strong impact on the inflation.
Economists have been advising Bangladesh Bank (BB) to take initiatives to tame inflation first and bring stability in the country’s economy.
The inflation showed a downward trend in the first two months (June and July) of FY2023-24. However, it went up again in August to 9.92 per cent.
Currently, it is continuing its recent trend of higher general and food inflation rate in rural areas than the urban, despite rural areas hosting the lion’s share of agricultural production,
The BBS data showed that food inflation in cities was 12.01 per cent in September compared to 12.51 per cent in villages–a 0.50 percentage point difference. In the previous month, food inflation in cities was 12.11 per cent in August, compared to 12.71 per cent in villages – a 0.60 percentage point difference.
The general inflation index for village and cities have difference as well. The rural areas had 9.75 per cent inflation while the urban areas had 9.24 per cent inflation in September.
Experts say that the rural populace has added many items from the urban areas in their menu, which must be transported. Besides, due to the improvements in the transportation network across the country, agro products grown in villages are quickly being supplied to the cities. This is causing a disparity in the supply and demand of food items in rural areas, and this is causing a rise in food inflation.
Food inflation reduces the people’s purchasing power, especially those in the fixed income groups. This also triggers an increase in the number of poor populations. The number of new poor people has already increased following the Covid-19 crisis.