Inflation in Bangladesh defies global downturn and local monetary tightening as the January rate peaked at 9.86 per cent by official count.
Bangladesh Bureau of Statistics (BBS) shows the latest situation with the consumer price index having turned up-as prices hit new highs.
The consumer price index, a broad-based measure of the prices shoppers pay for goods and services across the economy, increased by 0.45-percentage points to 9.86 per cent, according to the BBS disclosure made Thursday.
The rate of urban inflation touched almost double-digit level at 9.99 per cent while it stayed in rural areas at 9.7 per cent.
The national food inflation surged by 9.56 per cent while non-food 9.42 per cent.
Economists see import compression as the key push to inflation and say the January election spending might have been one of the key reasons as well.
They say there are some key goods having greater weights having remained high even in January, leading to rise in the CPI inflation.
The goods are potatoes, chickens, eggs and onions.
Dr Ahsan H. Mansur, executive director of the Policy Research Institute of Bangladesh, says the import tightening is the key reason behind the increase in the inflation.
"Imported goods' prices remained high following import restrictions," the economist told the FE writer.
"The inflation has moved its right direction as the prices remained stubbornly high," says Dr Zahid Hussain, an independent economist of Bangladesh.
Mr. Hussain notes that even during this winter, many vegetable prices remained high.
"The CPI report is a disappointment for the middle-income people who have been hit hard," says a central banker.
He, however, mentions that the exchange-market volatility has eased to some extent and so in the coming months inflation will ease.
Bangladesh Bank has taken strategic policy initiatives to ease external-sector pressures and establish a unified exchange-rate regime under a crawling-peg system. This move, once implemented, will mitigate downward pressure on the Bangladesh Taka (BDT).
And this strategy seeks to minimize the pass-through effects of BDT depreciation and contain inflation throughout FY24.
Additionally, the benefits stemming from BB's policy-tightening measures throughout the fiscal year are expected to play a pivotal role in curbing inflationary pressures.
The BB, however, expects the revised target of 7.50-percent inflation by the end of FY24 may be attained.
© 2024 - All Rights with The Financial Express
