Point-to-point inflation accelerated further in May, driven by rising prices in both food and non-food categories, according to official data released on Sunday.
Overall inflation, measured by the Consumer Price Index (CPI), rose to 9.42 per cent in May, data from the Bangladesh Bureau of Statistics (BBS) showed.
The increase indicates that the average price level of a fixed basket of goods and services was 9.42 per cent higher in May than in the corresponding month of the previous year.
The CPI index stood at 145.61 in May, up by 12.53 points from the same period a year earlier. The index is calculated using FY2022 as the base year.
Food inflation increased to 9.06 per cent in May, while non-food inflation climbed to 9.71 per cent, reflecting persistent price pressures across the economy.
Point-to-point inflation was 9.04 per cent in April.
Inflationary pressures remained elevated in both urban and rural areas, although rural households continued to face a relatively higher cost burden.
Overall inflation in rural areas stood at 9.48 per cent in May, compared with 9.25 per cent in urban areas.
Meanwhile, the 12-month moving average inflation rose to 8.63 per cent in May from 8.59 per cent in April. The indicator was 8.60 per cent in March.
The moving average is widely used by policymakers and central bankers to smooth short-term volatility and reduce seasonal distortions in inflation trends.
Dr Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), said there is a risk that inflation could remain on an upward trajectory, hitting low-income groups hard.
"The recent increases in fuel oil and electricity prices are affecting all sectors of the economy," he said.
Higher fuel costs raise transportation expenses, which subsequently increase production and distribution costs across supply chains, adding further pressure on consumer prices, he added.
Dr Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), told The Financial Express that prices of almost all categories of goods and services increased during the month under review.
He said prices of edible oil and several other essential commodities rose further during the period.
"You cannot buy most vegetables, except potatoes and leafy vegetables, for less than Tk100 a kilogramme," he said, adding that egg prices also remained volatile throughout the month.
Dr Islam, a former executive director of Bangladesh Bank, said recent increases in fuel and energy prices have intensified inflationary pressures by raising transportation, production and distribution costs across the economy.
He suggested that the policy rate should remain unchanged or stay tight in the upcoming monetary policy stance.
For compiling the CPI, the BBS collects price data from 154 major markets across the country, including 90 urban markets and 64 rural markets.
Urban coverage includes the Dhaka and Chattogram city corporations, other divisional cities and district towns.
The statistical agency collects three price quotations for each item and its varieties from every market surveyed.
The CPI basket comprises 127 food items with 242 varieties and 256 non-food items with 507 varieties.
Price collection is conducted monthly in rural and urban areas, while data from the Dhaka and Chattogram city corporations are collected on a weekly basis.
jasimharoon@yahoo.com
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