Inflation highest in eight months
Economists blame soaring price of staple rice in domestic market, and rising edible oil rates on international market
The average inflation in the recently concluded 2020-21 fiscal year has overshot the government target, thanks to pricier food items and other essentials.
The average inflation last year surged to 5.56% as the government had set the rate at 5.4%, according to the Bangladesh Bureau of Statistics (BBS).
According to the BBS, June inflation was 5.64% – the highest in the last eight months. The highest monthly inflation in the 2020-21 fiscal year was 6.44% in October as May's inflation stood at 5.26%.
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In June 2020, the general inflation was at 6.02% as the annual inflation in the 2019-20 fiscal year was 5.65%.
Economists said inflation in June, the last month of the 2020-21 fiscal year, ticked up on the back of soaring price of staple rice in the domestic market, and rising edible oil rates in the international market.
"Rising rice prices have had a major impact on inflation. The price of newly harvested paddy is still up. In addition, prices of essential items have been edging up as edible oil prices have surged by 40% in the international market," said Dr Ahsan H Mansur, executive director at the Policy Research Institute (PRI).
Pandemic-led disruptions in the global supply chain and an increase in demand have led to the situation which may intensify in upcoming months, he added.
The PRI executive director said the excess liquidity in banks and deposit growth have also been reflected in the spurted inflation rate.
Echoing Ahsan H Mansur on pricier staple and oil affecting the inflation rate, Dr Nazneen Ahmed, country economist of the United Nations Development Programme (UNDP) Dhaka office, said a prolonged lockdown in June disrupted the transportation of goods in Bangladesh.
According to the BBS, food inflation was 5.45% in June, up from 4.87% in May. Food inflation was 6.54% in June last year. Apart from rice and oil, prices of other food items such as fish and spices also went up in the last month of the last fiscal year.
The non-food inflation had been ticking up since February as people had to pay more for non-food items such as clothing, construction materials, transportation and medical care.
June's non-food inflation rose to 5.94, which was 5.86% in May. Non-food inflation was at 5.22% in June 2020.
