Dhaka, Bangladesh (BBN) – Bangladesh’s inflation as measured by consumers’ price index (CPI) decreased further in the month of July on point-to-point basis following declining prices of non-food items.
The rate of inflation dropped by 0.13 percentage point to 5.40 per cent in July 2016 from 5.53 per cent of the previous month because of the declining prices of non-food items.
The non-food inflation came down to 6.98 per cent in July last from 7.50 per cent of June while food inflation reached 4.35 from 4.23 per cent, according to the Bangladesh Bureau of Statistics (BBS) data.
“Food inflation rose slightly last month because of Eid but prices for everything else except food went down. All in all, general inflation is down in point to point basis,” Planning Minister AHM Mostafa Kamal explained while speaking at a press conference in the capital on Tuesday.
In the rural areas, overall point-to-point inflation came down to 4.54 per cent in July from 4.63 per cent a month ago while the urban inflation rate dropped to 7.0 per cent from 7.23 per cent.
The rate of wage also increased to 6.13 per cent in July from 6.10 per cent in June, the data showed.
The central bank expects that the inflation would bring down at 5.8 per cent on 12-month- average basis by the end of the fiscal year (FY) 2016-17 from the existing level.
The Bangladesh Bank (BB) said in its latest monetary policy statement that downward edging annual average CPI inflation eased to 5.9 per cent in June 2016. “But its higher nonfood component is under pressure from wage gains of rural laborers and public employees; offset somewhat by continuing moderate trends of global commodity prices.”
This, coupled with proactive management of market liquidity, is expected to keep FY 17 CPI inflation at or close to the 5.8 per cent target level, it added.