Inflation (point-to-point) declined marginally by 0.46 percentage points to 7.39% in August despite increase in food prices. It was 7.85% in July.
But, the food inflation increased by more than 2% measured on the month-to-month basis (July to August this year), according to data Bangladesh Bureau of Statistics (BBS) released Thursday.
“Prices of some essentials like rice, pulses, onion and garlic have increased in August as compared to July, leading to increase in food prices on monthly basis,” BBS Director General Mostafa Kamal told a press briefing in Dhaka.
But on point to point basis, the inflation marginally declined. Analysts said the overall inflation dropped in August mainly due to falling commodity prices both at domestic and international markets.
The country’s political atmosphere during the month of August was relatively calm, which helped keep the prices of essentials stable, they said.
“August month saw smooth transportation of essentials,” said Ahsan H Mansur, executive director at the Policy Research Institute (PRI) of Bangladesh.
But, it would be very tough to maintain as the unproductive expenditure both from private and public sources would accelerate in the months ahead of general election, he said.
He said non-food items remained stable during August as there was no abnormal hike of non-food items, including house rents and transportation cost.
Zaid Bakht, director (research) at Bangladesh Institute of Development Studies (BIDS), said: “The country will see non-productive expenditures during election period. And this will contribute to push up the inflation.”
He said the government has failed to contain inflation in consistent with the fiscal year’s target in the first two months of the FY2014. The food inflation slowed down in rural areas in August compared to the previous month and it was 7.5% against 7.52% in July.
The non-food inflation in rural areas, however, rose to 7.83% in August as compared to 7.27% in July.
In urban areas, the food inflation witnessed a fall in August as it stood at 9.52%, down from 9.65% in July.
The non-food inflation in urban areas dropped in August to 7.08% from 7.59% in July.
The BBS took into account prices of 318 items in rural areas and 422 in the urban areas while compiling the report on inflation.
BBS decided not to publish inflation statistics on old base year (1995-96) from this month.