Inflation creeping up
Inflation in Bangladesh increased for the third consecutive month in September as prices of both food and non-food items are showing upward movement, hurting the low-income people.
The general inflation rose five basis points to 5.59 per cent last month, which was 5.54 per cent in August, according to data from the Bangladesh Bureau of Statistics (BBS).
Inflation is rising in Bangladesh as the prices of most of the commodities rocketed in the global markets because of demand recovery, an unprecedented level of shipping charges, and supply constraints.
Non-food inflation rose six basis points to 6.19 per cent in September. It was 6.13 per cent August. Food inflation was up five basis points to reach 5.21 per cent, which was 5.16 per cent in August.
The prices of rice, egg, wheat, garlic, onion, ginger, and turmeric went up last month, said the BBS in a press release.
In the rural areas, food inflation rose to 5.74 per cent from 5.67 per cent in August. Similarly, non-food inflation went up to 5.84 per cent from 5.79 per cent.
However, the inflation situation was slightly better in the urban area: Food inflation increased to 4.03 per cent in September from 4.02 per cent in August.
Non-food inflation in the urban areas rose to 6.65 per cent from 6.59 per cent in August.
''We should worry about inflation because it has already gone past the target and domestic administered prices of oil, gas and electricity have not been adjusted yet,'' said Zahid Hussain, a former lead economist of the World Bank's Dhaka office.
He said inflation had surged globally, and Bangladesh appeared to be joining this trend.
"Inflation rose across the board in September, although not by a lot."
The impact of higher inflation would directly hit the lower-income people, which are already facing reduced incomes since the start of the pandemic.
Inflation remained stable at 5.6 per cent in the last fiscal year, marginally above the Bangladesh Bank's target of 5.5 per cent.
Hussain said workers were feeling the sting as the wage growth was behind inflation in most labour-intensive sectors.
"The picture looks bleaker in non-food inflation in urban and rural areas where it was a solid one percentage point plus higher in September relative to September 2020."
He said both demand-pull and cost-push were responsible for the general rise in prices.
In the last one and a half years, hardly anyone was spending money due to the pandemic. Now that the economy has reopened, people are spending and travelling and, as such, there is rising demand.
The strained supply chain has caused a surge in commodity prices globally which is beginning to transpire in local prices, magnified by exchange rate depreciation, according to Hussain.
''Add to this the alleged market manipulation by big traders, and you have the potential of soaring inflation in coming months,'' he told The Daily Star.
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