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Dhaka Tribune

Inflation continues to rise

Update : 06 May 2015, 06:50 PM

Inflation moved up for the third straight month in April, rising to 6.32% from 6.27% in March,  due to the ongoing negative impact of the supply chain disruption that occurred in the wake of the recent countrywide political violence, observe analysts.

Inflation increased as prices of some food items spiked, according to the Bangladesh Bureau of Statistics's latest data released yesterday.

Analysts blamed the continued effect of disruption in the products’ supply chain due to the three-month long countrywide transport blockade from January 5..

“The effect of supply chain disruption still exists, pushing the country’s inflation marginally up, which is not worrisome,” said former finance adviser Mirza Azizul Islam while talking to the Dhaka Tribune. 

He also stated that inflation might come down in the coming months due to restoring supply of goods, decline in rice prices due to good boro harvest, price falls in petroleum products and other key commodities globally. 

Planning Minister AHM Mustafa Kamal, however, explained the causes of soaring inflation, as saying, “The overwhelming celebration of the recent Bengali new year ‘Pahela Baishakh’ across the country has pushed the demand side against the supply side, which leads to increased inflation in April.”

According to the Trading Corporation of Bangladesh, the price of hilsa rose by 6.25% in the last month, compared to the previous month. The price of potato was up 5.88%, onion (imported) 11%, onion (local) 8% and garlic 25%,  while other items including rice, oil, sugar and pulse dropped slightly during the period.

Political turbulence along with the non-stop transportation blockades and series of strikes caused severe supply chain disruptions for more than 90 days, beginning from the first week of January. 

Prices of foods increased at a slower pace last month as the supply disruption cautiously and slowly moved back to normal in recent weeks. 

Overall month-to-month food inflation rose to 6.48% in April from 6.37 % in March, the BBS data showed. 

In contrast, non-food inflation moved down 6.08% from 6.12% in the previous month. Prices of goods, mostly produced in the rural area, increased because of the supply chain disruption.   

“Consumers proffered to buy food items, rather than non-food items in any celebration, resulting in surging food inflation,” said an official. 

BBS data also showed that in urban areas, the inflation rate in April was 6.88%, which was 6.77% in March and in rural areas, it was up 6.03% from 6.01%.

In urban areas, food inflation surged to 7.62% from 7.36% and in rural areas, it rose to 5.99% from 5.95% during the period. In the case of non-food inflation, it went down in both urban and rural areas.

The government aims to trim inflation to 6.5% in the current fiscal year. The national wage index rate witnessed a rise of 9.36% growth in April from 9.27% in March. 

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