Inflation eases slightly to 8.91% in October

Point-to-point inflation has dropped slightly for two straight months and stood at 8.91% in October mainly due to the ease of inflation of food items, after more than a decade-high inflation hit in August.

The rate of inflation was 9.1% in September and it reduced by 0.19% as food inflation reduced by 0.58% from 9.08% in September to 8.5% in October.

However, the non-food inflation increased by 0.45% and stood at 9.58% in the last month from 9.13% in September, the latest report of the Bangladesh Bureau of Statistics (BBS) reveals.

Planning minister MA Mannan disclosed key points of the report at a media briefing arranged at the NEC auditorium in the capital yesterday following the meeting of the Executive Committee of the National Economic Council (Ecnec) chaired by prime minister Sheikh Hasina.

"As we have said several times earlier, inflation will come down. It declined significantly in October. We are happy that the lower income consumers were relieved," planning minister said at the briefing.

"The rate of wage also increased in October," the minister said, adding, "Rising wage with reducing inflation is a good achievement for the government."

Quoting the report, he said that the overall wage index in October increased by 6.91%, which was 6.86% in September.

Time series data of the BBS revealed that inflation is rising in Bangladesh following the volatility in the global market due to the war between Ukraine and Russia in February. The prices of energy, fuel, fertiliser, food and some other essentials increased at a historic high rate in the global market due to the war. The rising trend of transportation costs pushed the commodity prices even up to 50%.

A fresh hike of fuel price in August drove the point to point inflation at a decade highest 9.52%. It dropped by 0.61% in the last two months.

Dr Zahid Hussain, former lead economist of the World Bank, told The Business Standard that the rate of reduction in inflation is very low and overall inflation is still very high. The inflation reduced slightly only due to a slower increase of price for a few items.

The economist also said that the non-food inflation increased for the last three straight months due to increase in the price of fuel which pushed the cost of transportation and commodity price. The non-food inflation may push the food inflation further up.

He said that the government failed to ensure proper implementation of austerity measures in terms of public spending and import. He urged to ensure further austerity and proper initiatives to boost food production.

He also said that some austerity should be ensured from the private sector as well. Increase in the interest rate will reduce private spending and depreciation exchange rate will reduce import cost, he added.

Dr Shamsul Alam, state minister for planning, said at the briefing that the economy is facing inflationary pressure as the price of essentials are rising all over the world. 

"However, it is good news that inflation in Bangladesh is coming down," he added.