Food price pushes inflation to 5.68% in August

The adverse impact of the Covid-19 pandemic has decreased the purchasing power of many people across Bangladesh.

Besides, people in different parts of the country are still vulnerable to prolonged floods. The rising trend of food prices has emerged as a new concern for the disaster-stricken new poor people.

The latest government data released on Tuesday shows that the price of food items has increased by 6.08 percent in August, compared to the same period in the previous year.

Price hike of the food items pushed point-to-point overall inflation to 5.68 percent in August.

Despite the non-food inflation dropping to 5.05 percent compared to 5.28 percent of July, the overall inflation increased by 0.15 percentage points in August.

The report of inflation compiled by the Bangladesh Bureau of Statistics (BBS) was presented at the meeting of the Executive Committee of the National Economic Council (Ecnec).

According to the report, the price of vegetables such as potatoes, eggplants, okra; spices such as green chilies and onion; and other essential commodities such as sugar and eggs increased in August. This in turn caused the food inflation to go up as well.

Commenting on the matter, Centre for Policy Dialogue's Executive Director Dr Fahmida Khatun said, "Aside from damaging the production of agricultural goods, the Covid-19 pandemic and flood have also severely disrupted the supply chain.

"As a result, the price of such goods has increased."

She continued, "Poor people are eating less after their income dropped and the food prices kept increasing. This issue will negatively impact the overall nutrition sector. The floods prevented the planting of Aush paddy, and damaged the Aman crops.

"Under such circumstances, there are concerns that the food prices will continue to increase in the coming days."

Urging that the stock of food grains be increased further at the government level, Dr Fahmida said, "The domestic supply and demand should be identified as soon as possible. Efforts must be made to import food if the need arises."

The BBS report revealed that the overall inflation in rural areas has slightly increased to 5.60 percent in August, compared to 5.43 percent in July. Besides, the overall inflation in urban areas has increased to 5.81 percent in August, which was 5.72 percent in July.

The August inflation rate of 5.68 percent indicates that a commodity, which was Tk100 in the last year, will now cost Tk105.68. A person will have to buy a lower volume of the commodity if his/her income remains static.

However, a BBS report found 5.91 percent wage growth in August, compared to the same period in the previous year.