Inflation comes down to 22-month low

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Shakhawat Hossain
The point-to-point inflation dipped 22-month low at 6.12 per cent in November last, thanks to falling prices of commodity items in international and local markets, officials said Monday.
The food inflation was recorded at 6.68 per cent in November, down by 1.20 per cent from the month of October.
The non-food inflation also dropped by 0.70 per cent to 5.25 per cent in the penultimate month of the current calendar year from the previous month, said the Bangladesh Bureau of Statistics (BBS) officials.
The BBS officials said the caretaker government slashed prices of petroleum products in October by almost 10 per cent whose impact was seen in the last month.
Inflationary pressure was reverse in November 2007 as it was up at 11.21 per cent.
The downward trend in inflation will be a big relief for the country's economy as it marked lowest since January 2007 point-to-point inflation at 5.94 per cent.
"The country's economy was shaken by the double-digit inflation during the last two years," said a central bank official.
The central bank officials had to struggle to contain the inflation during the period. Its officials are now certain that inflation will come down further and will be stable at a tolerable level.
In line with suggestion of International Monetary Fund (IMF) the Bangladesh Bank had to take measures at least twice in last six months to squeeze money flow.
Experts, however, said the falling commodity price in the international market is mainly leading the country's inflation downward.
Bangladesh Institute of Development Studies (BIDS) Senior Executive Zaid Bakht said the local traders are responding to the international market situation which has been hit hard by global financial recession.
"They (businessmen and importers) are sure that prices of commodity items would not increase in near future," he said.
Dr Bakht said the central bank's policy to reduce money flow has nothing to do with the downward inflation as it was supply-driven and not demand-driven.
He, however, is in same opinion with the central bank officials that the country will not face any major inflationary pressure in near future unless there is any adverse situation in Boro production.
The cultivation of Boro, the country's largest food grain which accounts for 60 per cent of the annual cereal production, has just started. Its harvest will be competed in April.
Rice, the country's main staple food, has a substantial amount of weight in the BBS inflation basket fixed in fiscal 1995-96. The basket has more than 1000 consumers' products, said the BBS officials.