Inflation declined 0.2 percentage points to 7.85% in July on the back of softening rice, vegetables and other produces, Bangladesh Bureau of Statistics (BBS) said yesterday.
It was 8.05% in June, the final month of the last fiscal year.
However, the inflation rate remained above the government estimate at 7% for the current fiscal year.
Food inflation was down 0.12 percentage points to 8.14% and non-food inflation to 0.35 percentage points to 7.4%, it said.
“Drop in food prices has helped inflation fall slightly,” BBS Director General Golam Mustfa Kamal told a press briefing at the BBS headquarters in Dhaka while releasing the Consumer Price Index (CPI).
He said the general perception is that inflation should have been surged due to holy month of Rama-dan. But the BBS calculates inflation each month for a period of 21 days of a month.
“The prices of rice, atta, fish, vegetables, spices and powdered milk have fallen in July against those in the previous month, leading to the drop in inflation,” he said.
In rural area, inflation in the last month was 7.43%, which was 8.64% in the rural area. In the month of June, inflation in rural area was 7.53%, which was 9.08% in urban area.
The food inflation slowed down in rural areas in July compared to the previous month and it was 7.52% against 7.58% in June.
The non-food inflation in rural areas was also found declining as it was 7.27% in July compared to 7.43% in June.
In urban areas, the food inflation rate witnessed a declining trend in July as it stood at 9.65%, down from 9.94% in June.
The non-food inflation rate in urban areas also witnessed a downward trend in July as it stood at 7.59%, down from 8.21% in June.
“Lower food prices both in domestic and international markets were mainly behind the fall in infla-tion,” said Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI).
But inflation is still hovering over 7%, which is higher than the fiscal target, he said. The main challenge is to bring inflation further down by 1%, he said.