Inflation eases further in June

The overall inflation eased by 0.59 percentage points (point-to-point basis) to stand at 8.56 percent in June, mainly due to the fall in prices of both food and non-food items, government data shows.

Despite the point-to-point basis fall, the twelve-month average inflation rate is still high and it was 10.62 percent last month, up from 8.8 percent a year ago.

The government targets to bring down the average inflation rate to 7.5 percent in the current fiscal year.

In May this year, the overall inflation rate was 9.15 percent. Point to point inflation hovered around double digit since March last year and remained so till November, marking a gradual fall since.

Last month, food inflation fell by 0.38 percentage points and non-food inflation by 1 percentage point, according to Bangladesh Bureau of Statistics (BBS) data released on Thursday.

Food inflation in June came down to 7.08 percent from 7.46 percent a month ago. It was 13.75 percent in last September. Non-food inflation hit a record 13.96 percent in March, but stood at 11.72 percent last month.

Releasing the data, BBS Director General Golam Mostafa Kamal told reporters on Thursday that the inflation rate came down as prices of rice, spices and other food items fell.

“There is room for further reduction in inflation rate without it adversely affecting the economic growth. Bangladesh Bank‘s monetary policy will support this objective as we would like to see non-food inflation also coming down to single digit,” Hassan Zaman, Bangladesh Bank governor’s senior economic adviser, told The Daily Star yesterday.

In the first six months of the last fiscal year, non-food inflation rose at an alarming rate due to high bank borrowing by the government, a finance ministry official said.

Later, the government reined in the bank borrowing while the central bank adopted a tight monetary policy. These two combined helped reduce the inflation rate, the official added.

A Bangladesh Bank statement last week said the inflation went up due to the rise in prices of essentials and fuel on the international and local markets.