Dhaka, Bangladesh (BBN)– Bangladesh’s Consumers Price Index (CPI) inflation increased marginally following higher demand for food and non-food items in September this year which was the month of holy Ramadan.

The CPI inflation rose to 10.06 per cent in September on an annual average basis from 10.01 per cent of the previous month – August- mainly due to the increase in prices of food items, officials said.

The food price inflation rose to 12.63 per cent in the month of September 2008 from 12.56 per cent in August last on an average while that of non-food items remained unchanged at 6.01 per cent, according to the Bangladesh Bureau of Statistics (BBS) data.

On the other hand, the inflation rate slightly moved up to 10.19 per cent on a point-to-point basis in September from 10.11 per cent of the previous month because of higher prices of non-food items.

“The country’s overall inflation has increased slightly because of huge consumption of both food and non-food items in the month of holy Ramadan,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in Dhaka.

He also said food prices are still influencing the country’s overall CPI inflation.

In fiscal 2007-08, the contribution of food to overall inflation was 76 per cent in the rural areas and 67.27 per cent in the urban areas while non-food accounted for 24 per cent and 33 per cent respectively, according to a central bank study report.

Of the food items, the contribution of rice was 73 per cent in rural areas and over 31 per cent in urban areas, the study added.

The food price inflation dropped to 12.07 per cent in September from 12.36 per cent of August last on point to point basis while that of non-food items rose to 7.19 per cent from 6.55 cent, the BBS data showed.

“We expect the inflation will start declining from the month of October that would continue until the end of this calendar year because of falling trend in food prices,” another BB official told BBN in the capital, Dhaka.

However, the pressure of prices in rural areas was higher than in urban areas. The general inflation in rural areas stood at 10.62 per cent in the month of September while that of urban areas reached 9.12 per cent on the point-to-point basis.

BBN/SI/SS/AD-31October08-12:57 PM (BST)