Point-to-point price inflation has jumped to a new high of 10.67 per cent in April, the highest spike since July 2008, as the rising food prices hit consumers mostly in the rural areas of the country, officials said Monday. The Bangladesh Bureau of Statistics (BBS) said the ballooning inflation was driven by a 14.36 per cent increase in food prices as rice, wheat, edible oil and sugar prices set new marks both in domestic and international markets. The state-owned statistical department, however, showed that the non-food inflation has fallen to a record low of 3.97 per cent in April as the expenses for clothing, footwear, gross rent, fuel and lighting, and medical & health care have decreased. The point-to-point inflation crossed double-digit for the first time in March since October 2008, which is still maintaining a bullish trend. In April, the price inflation has swelled by 0.18 percentage points from 10.49 per cent in the previous month of March this year, the statistics released by the BBS said. The soaring point-to-point inflation is a sign that the government's efforts to rein in prices through sale of subsidised rice has largely failed to make headway. BBS showed that the rising food prices contributed the most to the price upswing. Food inflation jumped more than two years' high to 14.36 per cent, up from 13.87 per cent in the previous month of March. "The Inflation has been swelling due to high food prices. The food price spike was nearly four times higher than the non-food prices'," a senior BBS official told the FE. Officials said the poor and people living in the rural areas -- home to 70 per cent of Bangladesh's 150 million people -- are the hardest hit by soaring prices of food and other commodities. "In the recent months, food prices in villages have been shooting up steadily despite expansion of subsidised rice sales in the sub-districts. The jump is bigger than in the cities and district towns," he said. BBS showed the point-to-point inflation in rural areas stood at 11.49 per cent in April, which is 2.87 percentage points higher than 8.62 per cent in the urban areas. In the rural areas, the food inflation was recorded 15.38 per cent and non-food inflation 3.90 per cent, the data released by BBS showed. Prices of food items underwent an upswing of 12.04 per cent in urban areas and non-food items 4.18 per cent last month. Inflation started to creep in from December last year in the wake of an upward trend in global oil and food prices. "Inflationary pressure on the economy has emerged as a key challenge for the government. If it is not checked now, the economy will be affected badly," economic analyst Dr. Zaid Bakth told the FE. He said the higher food price both in the local and international markets, depreciation of taka against the US dollar and mismanagement of the commodity supply chain are the major reasons behind the ballooning inflation. The growing food inflation is very much challenging for the country although the decreased non-food inflation has created question about the authenticity of the data released by the BBS, Dr. Bakth said. He suggested the government to take necessary fiscal and policy measures to tackle the ballooning inflation. In June last year, the government had set a target to keep the inflation bottled up at around 6.50 per cent in the current 2010-11 fiscal.
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