Dhaka, Bangladesh (BBN) – Bangladesh’s overall inflation as measured by consumers’ price index (CPI) is showing a downward trend, but non-food inflation still remains a challenge, the central bank said.
“Throughout the fiscal year 2011-2012 (FY12), non-food inflation has been increasing mainly due to upward adjustment in administered fuel and power prices,” the Bangladesh Bank (BB) said in its report on Major Economic Indicators: Monthly Update for May 2012.
“We expect a reduction in non-food inflation in the rest of the FY12 in light of the restrained monetary stance implementing by the BB,” it noted.
Earlier, on January 26, the BB unveiled a restrained monetary policy, aiming to bring down inflation to a single-digit by June through discouraging credit flow to unproductive sectors.
Despite a rise in non-food inflation, the annual average rate of inflation fell slightly to 10.76 percent in May from 10.86 percent in April due to a decrease in food inflation, according to the report.
The rate of inflation on point-to-point basis also fell to 9.15 percent in May from 9.93 percent in the previous month due to the decline in both food and non-food inflation.
The food price inflation came down to 7.46 percent in May from 8.12 percent in the previous month, while non-food items price also fell to 12.72 percent from 13.77 percent on the point-to-point basis, according to the Bangladesh Bureau of Statistics (BBS) data.
“Food inflation moderated in recent times, as domestic food supply situation improved due to satisfactory domestic food production and expansion of public food distribution channels,” the central bank noted.
The actual production of food grains stood at 34.513 million tones during FY11, compared to 33.226 million tons in FY10, according to official figures.
Food grains import stood lower at 2.029 million tones during the July-March period of the FY12 against 4.16 million tones in the corresponding period of the previous fiscal, the BB’s data showed.
BBN/SSR/AD-14June12-2:00 am (BST)
